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(Corrects spelling of Elliott in headline and paragraph 3. Also corrects investment firm's name to Roosevelt from Roose in paragraph 5)
By Mehnaz Yasmin
Aug 2 (Reuters) - PayPal Holdings on Tuesday said activist investor Elliott Management has an over $2 billion stake in the fintech company and the firm raised its annual profit guidance.
PayPal shares shot up nearly 12% after it also announced a slew of moves including appointing Blake Jorgensen as new chief financial officer and a $15 billion repurchase program.
The fintech company has "an unmatched and industry-leading footprint across its payments businesses," said Jesse Cohn, a managing partner at Elliott, a day after the investment firm disclosed a similar stake in Pinterest Inc.
PayPal, which was among companies that won big during the pandemic, saw shares wipe out over 70% of their market value in a year as e-commerce growth retreated from pandemic-era records.
"Considering the stock's meaningful underperformance over the last nine months, this may be enough to satisfy investors, who have lost some measure of faith in management credibility after so many downward revisions," said Jason Benowitz, senior portfolio manager at Roosevelt Investments.
PayPal also expects to reduce headcount to cut back costs and said it estimates annual revenue to grow at 11% on an FXN-basis, its lower end of previous guidance of ~11% and 13%.
"PayPal let an activist investor inside the tent with an information sharing agreement. We expect the company to materially refresh its top management layer and make tough choices to improve profit margins," said Benowitz.
The company also announced a slew of moves including appointing Blake Jorgensen as Paypal's new chief financial officer and a new $15 billion repurchase program. Blake, who takes over the role on Wednesday, joins PayPal from Electronic Arts.
The company reported a lower adjusted profit of 93 cents per share for the three months ended June 30, that comfortably beat estimates of 86 cents a share.
It raised its adjusted profit expectations to between $3.87 and $3.97 per share for the year, up from its previous forecast of $3.81 and $3.93. (Reporting by Mehnaz Yasmin in Bengaluru; Editing by Krishna Chandra Eluri)