Tech Selloff: Hedge Funds are Dumping These 5 Stocks in 2022

2. Paypal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 100

Decline in Hedge Fund Holders: 10

Paypal Holdings, Inc. (NASDAQ:PYPL) is a payment solutions provider which lets users send and receive money in 200 markets around the globe in approximately 100 currencies. Shares of the world’s most prominent digital payments company were not immune from the negative market sentiment around tech stocks, and as of May 25, they have slid 58.90% in the year to date.

110 hedge funds held positions in Paypal Holdings, Inc. (NASDAQ:PYPL) at the end of December, but this number dwindled down to 100 hedge funds at the close of the first quarter. In Q1 2022, Fisher Asset Management was the most prominent shareholder of the company, holding a gigantic stake worth more than $1.9 billion.

Analyst James Faucette of Morgan Stanley maintained an ‘Overweight’ rating on Paypal Holdings, Inc. (NASDAQ:PYPL) shares on May 10, and adjusted the price target to $137 from $139. He feels that the market is missing the firm’s outperformance as it continues to outpace underlying e-commerce growth. The company’s revenue trajectory has normalized since coming out of the pandemic, but this is not a structural issue according to the Morgan Stanley analyst.

Paypal Holdings, Inc. (NASDAQ:PYPL) posted its Q1 earnings at the end of April, and reported EPS in-line with estimates. $6.48 billion in revenue for the quarter beat analysts’ estimates by $75.6 million.

Investment firm Wedgewood Partners discussed the market position of PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2022 investor letter. The fund said:

“PayPal also detracted from performance during the quarter as investors panicked in the face of the well-telegraphed run-off of eBay’s revenues. We have been aware of the runoff of eBay’s revenues since at least the third quarter of 2017.2 Although markets are supposedly efficient, maybe markets are only as efficient as long as the same shareholders are in the stock. When a shareholder base turns over several, if not dozens, of times over a 5-year time frame, perhaps old news periodically becomes “new” to a market riddled with transient shareholders. In any case, we increased our weightings in the stock for the first time since 2018 as the only thing “new”to us was the highly attractive multiple for a competitively wellpositioned business in the e-commerce industry.”