Yahoo Finance PayPal performing 'strongly' despite government shutdown: CEO
After a red-hot 2018, PayPal (PYPL) still has momentum on its side despite the government shutdown.
The fintech giant’s CEO Dan Schulman told Yahoo Finance the business is performing “strongly” right now. “We are not seeing an impact [from the shutdown],” Schulman said.
Schulman’s comments stand in contrast to several other consumer oriented companies that have come out with financial warnings of late due to the partial government shutdown.
Delta Air Lines (DAL) CEO Ed Bastian said this week the shutdown will cost his company $25 million in sales this month as fewer government contractors and employees are traveling. Meanwhile, tech companies such as IBM (IBM) could be hit in the first quarter if the shutdown prevents companies from ordering new equipment.
While PayPal and many others have been unscathed by the shutdown so far, that doesn’t mean they will be completely immune.
The government shutdown — which is now the longest in history at more than four weeks — could easily have a greater impact on first quarter U.S. economic growth than feared. Not only are 800,000 government workers not getting paychecks, but government contractors have also been ensnared in the debacle. That could trigger a ripple effect in many parts of the consumer economy following a rather upbeat holiday shopping season.
The Trump administration said this week the partial shutdown would chop off 0.1% from growth every week. Previously, the administration believed the shutdown’s impact was a 0.1% hit to growth every two weeks.
For his part, Schulman is stepping up at PayPal to help those impacted by the shutdown.
PayPal said Friday its offering an interest free cash advance up to $500 for any existing — or new — PayPal Credit customers who are federal employees to assist in covering basic expenses. The company expects to fund up to $25 million of interest-free cash advances.
Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter @BrianSozzi
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