San Diego, CA -- (SBWIRE) -- 10/18/2022 -- An investor, who purchased shares of PayPal Holdings, Inc. (NASDAQ: PYPL), filed a lawsuit over alleged violations of Federal Securities Laws by PayPal Holdings, Inc.

Investors who purchased shares of PayPal Holdings, Inc. (NASDAQ: PYPL) have certain options and for certain investors are short and strict deadlines running. Deadline: December 5, 2022. NASDAQ: PYPL investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

San Jose, California based PayPal Holdings, Inc. operates one of the best-known digital payment platforms, enabling both merchants and consumers to make digital and mobile payments worldwide. In response to the COVID-19 pandemic, the global economy was forced to move online to a great extent and that benefitted online payment platforms such as PayPal Holdings, Inc. For the fiscal year ended December 31, 2020, PayPal Holdings, Inc reported a record 73 million new Net New Active Accounts ("NNAs") ending the year with 377 million active accounts.

However, in order to maintain pandemic level of NNA growth in 2021 PayPal Holdings, Inc turned to aggressive marketing campaigns which provided users with $10.00 (and sometimes as much as twenty dollars) when they opened an account with PayPal.

These campaigns allowed fraudsters (largely bot farms) to create millions of fake accounts, in order to accumulate value through PayPal's cash incentive. Cash incentive-based marketing campaigns are particularly susceptible to fraud because the opportunity to particularly attractive to fraudsters, because they can accumulate a large number of fake accounts and receive cash quickly.

Then, on February 1, 2022, PayPal Holdings, Inc. 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 Holdings, Inc. 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 Holdings, Inc. changed course on some of its customer acquisition strategies including incentive-led campaigns in the fourth quarter.

Further, because PayPal Holdings, Inc. 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."

Shares of PayPal Holdings, Inc. (NASDAQ: PYPL) declined from over $273 per share in October 2021, to as low as $92.25 per share on March 08, 2022, respectively $68.51 per share on July 13, 2022.

The plaintiff claims that between February 3, 2021 and February 1, 2022, while touting its NNA growth, PayPal Holdings, Inc. 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, that PayPal Holdings, Inc. 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 Holdings, Inc., and that investors were unaware of the lengths PayPal Holdings, Inc. 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.

Those who purchased shares of PayPal Holdings, Inc. (NASDAQ: PYPL) have certain options and should contact the Shareholders Foundation.

Contact:
Shareholders Foundation, Inc.
Michael Daniels
3111 Camino Del Rio North - Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739
mail@shareholdersfoundation.com

About The Shareholders Foundation
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.