PayPal's Legal and Operational Gauntlet Intensifies as Key Deadline Looms

PayPal shares slump over 22% YTD as class-action lawsuits loom and new CEO exits. The firm expands Venmo and social commerce on Canva to counter growth pressures.

PayPal shares, languishing at €38.62, have shed more than 22% since the start of the year, a stark reflection of the dual pressures facing the payments giant. While the company pushes forward with strategic expansions into social commerce and international transfers, it is simultaneously grappling with a significant legal challenge and the aftermath of a leadership shake-up.

The legal storm stems from events on February 3, 2026. On that day, PayPal reported disappointing fourth-quarter 2025 results, with revenue of $8.68 billion missing market expectations by $120 million and adjusted earnings per share also falling short. The company simultaneously announced the departure of CEO Alex Chriss. This one-two punch triggered a single-day stock plunge of over 20%.

Multiple US law firms have since filed class-action suits, alleging the company's management misled investors. The lawsuits center on claims that PayPal vastly overestimated the effectiveness of its sales force and that its ambitious growth targets for 2027 were unrealistic under prevailing market conditions. Investors who purchased shares in the last two years have until April 20, 2026, to apply to be a lead plaintiff in the ongoing litigation, a deadline now firmly in focus for the market.

Operationally, PayPal is attempting to counter pressure on its core growth. A major initiative is the international rollout of its Venmo app, recently made available in 90 international markets for the first time. Venmo remains a bright spot, processing $85 billion in total payment volume in Q4 2025, a 13% year-over-year increase. The company is also expanding its proprietary stablecoin, PYUSD, to 70 countries to facilitate faster, cheaper cross-border payments.

Concurrently, PayPal is making a strategic push into the burgeoning social commerce arena. The company has integrated its payment functions directly into the design platform Canva. This move allows Canva's 265 million active users to embed PayPal checkout pages—via QR codes, Venmo, or installment plans—directly into their digital creations, enabling sales without redirecting to separate online shops. Industry estimates project transaction volume in this direct-from-content shopping segment will surpass $1 trillion by 2028.

Despite these initiatives, analyst sentiment remains cautious, with many maintaining a "hold" rating on the stock as they await concrete results from the new strategies. The coming days offer two key events: the official presentation of the new payment app at a Canva event on April 16, followed closely by the April 20 deadline for the class-action lawsuit. For PayPal, the path to regaining investor confidence requires demonstrating that its international and social commerce expansions can reliably offset core weaknesses, all while navigating unresolved legal uncertainties.