PayPal CEO plans for a ‘fix’

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When Enrique Lores took the CEO post at PayPal Holdings this year, he knew the 28-year-old payments company needed to be "fixed," he said this week at an investor conference.

Now, the company's former board chairman, who became CEO in March , has a plan for repairing the company: reorganizing it into three main segments; selling more financial services to consumers; and pursuing acquisitions.

Lores mapped out those objectives during a presentation to investors Wednesday at the Goldman Sachs Communicopia and Technology conference.

With PayPal's stock down 20% over the past year, investors are eager to hear how Lores expects to resuscitate the San Jose, California company. That's especially the case after a reported sale of the business collapsed last month .

Without a sale, PayPal once again faces challenges on three key fronts, Mizuho Securities analyst Dan Dolev wrote in a report last month.

They include PayPal's legacy checkout brand becoming a commodity play; potential share loss in Germany; and the threat to PayPal's peer-to-peer payments unit Venmo posed by a competing X tool , Dolev said.

Part of the Lores plan is reviewing possible acquisitions for PayPal this year, he said at the conference. "If we do M&A, it will be totally related to the growth strategy that we have defined." As for timing, he said "at some point in the next quarter, we will start looking at that."

Lores didn't elaborate on the types of acquisitions the company might be interested in. Dolev said this week that he hadn't heard of any such plans.

But recently the company has been getting smaller, not bigger. PayPal has been considering divestitures , and this month began reducing its workforce as it strives to deliver $1.5 billion in annual run rate savings over the next few years.

Lores reiterated this week that integrating the technology assets that the company has accumulated over the years through its acquisitions is part of his plan to modernize PayPal's technology infrastructure.

Aside from the PayPal brand, the company also includes Braintree, which caters to big companies as well as Venmo.

To pull off these initiatives, Lores has rearranged the organizational structure he inherited around three new units, including branded checkout; processing and Venmo; and consumer financial services.

Lores said he believes establishing leaders and goals for each of those three segments will improve performance. "The major reason to do that was to increase and clarify accountability, and to accelerate decision-making," Lores said of the realignment.