Dan Loeb knows he’s got a bit of a reputation for being an asshole. Such are the wages of being an outspokenactivistinvestor, and also of comparing black politicians who disagree with his favored educational policies with the Ku Klux Klan. But, especially in recent years, the Third Point founder has found occasions upon which he need not have recourse to the poison pen. For instance, healthcare products company Baxter International, which Loeb—or an impostor—effusively praised with words like “applaud” and “most impressed” and “working together.” Or the malls of his Southern California childhood, whose continued viability he clings to in spite of all evidence. Or a certain company founded by a fellow sociopathic billionaire whose independence he helped engineer.
“We see parallels between PayPal and other best-in-class internet platforms like Netflix and Amazon: high and rising market share, untapped pricing power, and significant margin expansion potential,” the fund wrote in a second quarter letter to investors.
PayPal’s shares are trading at about $88. Third Point predicted they should hit $125…. Mr Loeb gave the company’s chief executive Dan Schulman a vote of confidence, calling him “excellent”….
Of course, this is Dan Loeb. Even in the companies he likes that do what he wants, he finds fault. So it is with PayPal, but, really, he’s just nitpicking.
The fund said PayPal should improve its operating margins and can reduce expenses in areas including information technology, customer service, credit servicing and collections. Third Point did not disclose the size of the stake purchase.