Business Corpus: PayPal Takes Stake In MercadoLibre As Both Face Growing Amazon ThreatPayPal Holdings has taken a stake in MercadoLibre as part of the e-commerce firm’s $1.8 billion equity offering. MercadoLibre stock fell after the news on Tuesday while PayPal stock rose. The post PayPal Takes Stake In MercadoLibre As Both Face Growing Amazon Threat appeared first on Investor's Business Daily.

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PayPal Holdings (PYPL) plans to own a stake in MercadoLibre (MELI) as part of the e-commerce firm's $1.8 billion equity offering. MercadoLibre stock fell on Tuesday while PayPal stock was about even.

The equity offering comes as MercadoLibre faces more competition from Amazon.com (AMZN) in Brazil, its largest market. In the deal, PayPal is investing $750 million in Argentina-based MercadoLibre.

Meanwhile, Amazon's growing payment ecosystem poses a long-term threat to PayPal, analysts say.

"Digital commerce in Latin America is experiencing tremendous growth and MercadoLibre is well-positioned for continued leadership," PayPal Chief Executive Dan Schulman said in a news release.

MercadoLibre Stock Slides from All-Time High

E-commerce firm PayPal's stock remains near an all-time high before the equity offering. MercadoLibre stock slipped 0.5% to close at 483.48 on the stock market today. PayPal stock edged up a tiny fraction to 97.50. PayPal stock has gained nearly 21% from a year ago.

Susquehanna Financial Group downgraded MercadoLibre stock to negative on March 8 on worries that Amazon plans a big push in Brazil. Amazon has been acquiring warehouse space in Brazil, Susquehanna said.

PayPal Stock In IBD 50

In addition, Dragoneer Investment Group plans to invest $100 million in MercadoLibre.

PayPal stock ranks No. 19 in the IBD 50 roster of growth companies. PagSeguro Digital (PAGS), a Brazil-based payment processor, ranks No. 16 in the IBD 50.

The payment processor in February reported fourth-quarter earnings that topped views.

PagSeguro stock took off after its initial public offering in January, 2018. However, PagSeguro stock later pulled back on disappointing earnings and a new equity offering.

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The post PayPal Takes Stake In MercadoLibre As Both Face Growing Amazon Threat appeared first on Investor's Business Daily.