PayPal’s value rises to $44 billion ahead of its separation from eBay

There’s been a lot of anticipatory excitement over eBay’s plan to spin off its faster-growing payments unit, PayPal. This week, the markets got to quantify the hype, as shares of PayPal began trading separately on a when-issued basis under the ticker symbol PYPLV. The spin-off, in which eBay shareholders will get one share of PayPal for every share of the parent company they hold, won’t be completed until July 17. But in the meantime, PayPal’s when-issued shares shot up to $37.40 on Tuesday. That’s more than 60% of the value of all of eBay even though PayPal’s sales last year were about 40% of the combined companies (they were about even in the first quarter of 2015). One reason investors are more excited about PayPal than eBay is the payment unit’s faster growth rate. Revenue was up 19% to $8 billion last year, about double the rate of growth in the older e-commerce and auction unit. The value of all transactions handled by PayPal increased 26% to $235 billion, fed not just by the company’s signature payment service but also by mobile transactions on the popular Venmo app it acquired in 2013.