PayPal Holdings Inc. (PYPLV) Acquires Xoom Corporation (XOOM) as It Becomes Independent Company

Let’s now move on to PayPal’s acquisition of Xoom. Xoom Corporation (NASDAQ:XOOM) is a leading digital money transfer provider that allows its customers to send money, pay bills and send mobile reloads to family and friends around the world in a very secure, fast and cost-effective way. Therefore, the acquisition will enable PayPal to expand its digital payment business and offer a larger range of services worldwide. According to a statement, the President of PayPal Holdings Inc (NASDAQ:PYPLV), Dan Schulman, believes that the acquisition of Xoom will enable PayPal to enter essential and growing adjacent marketplace, while Xoom’s presence in 37 countries will enhance the expansion in these markets. There are a few strategic benefits from the acquisition of Xoom Corporation (NASDAQ:XOOM), which might eventually boost PayPal’s growth in the future. One of the main benefits of the acquisitions is the extent of PayPal’s offering to its customers by cross-selling Xoom’s services. At the same time, the deal is anticipated to assist Xoom in expanding into new markets by leveraging PayPal’s sizable international network.

PayPal has been steadily growing and the Street has long considered that its spin-off will command a higher valuation. In this way, eBay and PayPal’s valuations upon the completion of the separation might be higher than their valuations as one entity. Moreover, there is a chance that some of the current shareholders might jettison their eBay positions and hold only shares of PayPal. So we might see some short-term upward pressure on PayPal and downward pressure on eBay. Additionally, PayPal’s merger with Xoom Corporation (NASDAQ:XOOM), which could potentially drag market share from other remittance companies as the “one-stop shop” aspect through one service provider might be tempting to some customers, might put even more upward pressure on PayPal shares. Thus, PayPal Holdings Inc (NASDAQ:PYPLV) might really represent a great buying opportunity for worldwide investors.

Disclosure: None