The law firm of Robbins Geller Rudman & Dowd LLP announces that purchasers of PayPal Holdings, Inc. common stock between February 3, 2021 and February 1, 2022, inclusive (the “Class Period”) have until December 5, 2022 to seek appointment as lead plaintiff in the PayPal class action lawsuit. Captioned Defined Benefit Plan of the Mid-Jersey Trucking Industry and Teamsters Local 701 Pension and Annuity Fund v. PayPal Holdings, Inc., No. 22-cv-05864 (D.N.J.), the PayPal class action lawsuit charges PayPal and certain of its top executives with violations of the Securities Exchange Act of 1934.
You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the PayPal class action lawsuit must be filed with the court no later than December 5, 2022.
CASE ALLEGATIONS: The PayPal class action lawsuit alleges that PayPal throughout the Class Period touted the growth in its Net New Active Accounts (“NNAs”) and instructed investors to value the high growth in this metric as one of the most important indicators of how PayPal was performing.
But as the PayPal class action lawsuit alleges, while touting its NNA growth, PayPal failed to disclose that many of the additional users acquired through its cash account creation incentive campaigns were illusory because those incentive campaigns were easily susceptible to fraud. Specifically, PayPal failed to disclose that its cash incentive campaigns significantly increased PayPal’s susceptibility to bot farms that were able to systematically take advantage of PayPal’s $10.00 account opening by creating millions of illegitimate accounts, which ultimately generated no future revenue for PayPal. In addition, the PayPal class action lawsuit alleges that investors were unaware of the lengths PayPal was going to keep inactive customers and fake bot accounts on the platform to prevent churn and inflate its NNA guidance which would have provided a more realistic view of the true demand for PayPal’s platform.
On February 1, 2022, PayPal revealed that its NNAs were only 49 million for 2021, less than the guidance of 50 million it initially provided in February 2021. In doing so, PayPal admitted that “in connection with the increased use of [cash] incentive campaigns throughout 2021, [PayPal] identified 4.5 million accounts that [PayPal] believe[s] were illegitimately created,” and that as a result PayPal changed course on some of its customer acquisition strategies including incentive-led campaigns in the fourth quarter. Further, because PayPal was evolving its customer acquisition and engagement strategy, PayPal now expected only 15-20 million net new customer accounts for 2022 and that PayPal “no longer believe[s] that the 750 million medium-term account aspiration [PayPal] set last year is appropriate.” On this news, PayPal’s stock price fell by approximately 25%, damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased PayPal common stock during the Class Period to seek appointment as lead plaintiff. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the PayPal class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the PayPal class action lawsuit. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff of the PayPal class action lawsuit.
ABOUT ROBBINS GELLER: Robbins Geller is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the 2021 ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors last year alone – more than triple the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world, and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. Please visit the following page for more information:
Robbins Geller Rudman & Dowd LLP
655 W. Broadway, Suite 1900, San Diego, CA 92101
J.C. Sanchez, 800-449-4900