David Einhorn Just Bet $61.5 Million on PayPal. Why PYPL Looks Cheap Again.

Renowned investor David Einhorn made a substantial investment in PayPal, purchasing 1.42 million shares valued at $61.5 million during the second quarter. His firm, DME Capital Management, is known for identifying value in companies that others overlook. Despite PayPal's stock plummeting more than 70% from its 2021 peak, Einhorn believes the company is executing a turnaround.

Earnings are exceeding estimates, free cash flow is surging, and there is potential for a buyout. The stock has been trading at roughly 11.7 times earnings, significantly below the sector median of 14 times, and far below its five-year average of 30 times. At first glance, PayPal may not appear to be a bargain. However, Einhorn's significant investment indicates he sees potential value in the company.