Shareholders Sue PayPal Over Doubts About Growth Potential

A class action lawsuit was filed against PayPal PYPL +1.45% ▲ on February 17, 2026.

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Plaintiffs -shareholders- in the federal securities class action allege that they acquired PayPal stock at artificially inflated prices between February 25, 2025 and February 2, 2026, known as the “Class Period.” They are now seeking compensation for financial losses incurred upon public revelation of the company’s alleged misconduct during that time. To learn whether you may be eligible for a recovery under this securities lawsuit, click here.

What Does PayPal Do?

PayPal is a pioneer in global digital payment services. As detailed in the complaint, the company links merchants and consumers to simplify the shopping experience for both. It does so by ensuring the safe and secure transfer of money in exchange for goods or services online or in person. This is accomplished through its “Branded Checkout solutions”, such as PayPal and Venmo, and through unbranded alternative offerings.

The company says its history dates to 1998, when it was known as Confinity. It quickly adopted its current moniker and set out to “create the world’s first digital payment platform.” By the year 2000, the company had more than 1 million users and attributed its growth to “eBay’s EBAY +0.51% ▲ community of online sellers.” In 2002, PayPal teamed up with eBay to become its official payment provider. The company hit another significant milestone in 2016, when it announced its “landmark partnership agreement with Visa V +0.38% ▲ Inc. to expand consumer choice in payments.” PayPal also claims that it has “forged more than 40 strategic partnerships, including [some] with leading banks” since then.

Why are Shareholders Suing PayPal?

PayPal and two of its former senior officers and/or directors (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding important information about the company’s business and prospects during the Class Period.

In particular, they are accused of omitting truthful information about the company’s growth potential and ancillary matters from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused PayPal stock to trade at artificially inflated prices during the time in question.

The truth, according to shareholders, came out on February 3, 2026. That’s when PayPal announced its financial results for the fourth quarter and full fiscal year 2025, unveiling disappointing earnings results with worsening performance in Branded Checkout. PayPal attributed the poor performance to a combination of macroeconomic factors, competition, and “operational and deployment issues” across all regions.

Taking a Closer Look

As alleged, the company and/or Individual Defendants repeatedly made false and misleading public statements throughout the Class Period.

During the company’s annual Analyst/Investor Day call, which was held at the beginning of the Class Period, for instance, PayPal’s then-CEO, an Individual Defendant, stated in pertinent part: “Well, we’ve committed from guidance to grow greater than 5% in transaction margin and ’25. As we look out into ’27, we see high single-digit growth for transaction margin.

On the same call, the company’s then-CFO, an Individual Defendant also stated in pertinent part: ‘So the first online branded checkout includes PayPal, branded checkout, eBay and Pay with Venmo. And it’s about 30% of our TPV. We have a clear plan and execution milestones to accelerate, and I’ll talk about that more in a bit.”

Next, during the company’s April 29, 2025 earnings call, PayPal’s then-CEO stated in relevant part: “… the best way to see the traction we’re gaining is through branded experiences TPV. Branded experiences comprises volume from PayPal and Venmo online checkout as well as branded in-store payment methods like debit and Tap to Pay.”

Finally, during a July 29, 2025 earnings call, the company’s then-CEO stated: “If we look at our 4 strategic growth drivers: Winning checkout, scaling omni and growing Venmo, driving PSP profitability, and scaling our next-gen growth vectors, we are making meaningful and tangible progress on all 4.”

Actions You May Take

If you have purchased the company’s stock during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole. To learn more about your options, click here.

The deadline to file for lead plaintiff in this class action is April 20, 2026.

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