Yahoo Finance Live anchors discuss stock performance for PayPal as well as why the financial tech company is backtracking on its misinformation policy.

Video Transcript

[AUDIO LOGO]

JULIE HYMAN: Some other movers that are watching right now include PayPal, catching a little heat. Down almost 4% after publishing a policy change that would subject users to a fine of $2,500 for spreading misinformation, according to the company. Then the payment platform in a widely-reported statement said, it published an acceptable use policy in error and will not be fining users for misinformation, at least not yet.

It's unclear whether it published in error or published it too early. But among the critics of that policy when it first came out and then was rescinded, was the former president of the company David Marcus, who tweeted about it. And basically said, he was critical of it. He said, "Paypal's new AUP goes against everything I believe in. A private company now gets to decide to take your money if you say something they disagree with. Insanity."

Now, there are lots of companies that tell you that you can't spread misinformation. All the social media companies have policies on this stuff. But I don't know that any other has introduced a fine associated with it. I guess that is what the real difference is here. But I also-- how do you spread misinformation on PayPal? Like, do you guys--

BRAD SMITH: Yeah.

BRIAN SOZZI: I mean, is it through-- PayPal owns Venmo. I don't know if that would apply to Venmo.

JULIE HYMAN: Like asking for money for things that are--

BRIAN SOZZI: Yeah. unclear.

JULIE HYMAN: --false?

BRAD SMITH: Yeah. I mean--

JULIE HYMAN: I don't-- I don't quite understand the examples of it.

BRAD SMITH: Even with the social networking capabilities that they've tried to add on to peer-to-peer payments, it's really not clear what's spreading of misinformation would actually be categorized as underneath of the platform, whether it's PayPal proper or the subsidiary, Venmo, to your point.

But for PayPal, it's the first company that would have introduced, I think, a fine for end users. And especially $2,500, that is a pretty steep fine that would have come forward had they moved forward with that. But it really does show that because all of the other platforms, to your point, they were either labeling posts saying--

JULIE HYMAN: Well, they suspend your account.

BRAD SMITH: Or they suspend your account, things of that nature. But nothing to the extent of a monetary fine that we'd seen even leaked out to the public, it seems like, at this point.

BRIAN SOZZI: Yeah, I think this story will be, you know, in the veer-- rearview mirror within a week or so. And then as an investor, you have to think about, what will the market turn to? And you see PayPal shares up 19% in the past three months, compared to the NASDAQ up 9%.

There have been, I think, a lot of expectations around how many costs PayPal could pull out of its business over the next six months. You've seen CEO Dan Schulman give some, I think, bullish presentations to various investment banks over the past few months.

I think the Street is really positioning for an inflection point in this company's margins. I'm just not sure they're going to get that in the third quarter and with that fourth-quarter guidance.

JULIE HYMAN: Well, and for the folks who are in management at PayPal, you don't like to see something like this sort of draw negative attention to the company, at the same time that they're trying to make some of that progress.

BRAD SMITH: Absolutely.

JULIE HYMAN: Yeah.