In 2015, eBay spun off (NASDAQ: PYPL) into its own publicly traded company. As an investing novice at the time, I didn't fully understand how it worked. So I bought shares of eBay beforehand so that I'd own shares of PayPal on Day 1. After the spinoff, I sold the eBay stock.

My investment thesis for PayPal was simplistic back then. I simply saw that cash transactions were falling and that digital payments were rising, to PayPal's benefit. And I also saw that the company generated a lot of free cash flow.

I figured PayPal's top-dog position in a growing market would lead to much higher profits down the road, boosting the stock price.

Continue reading

Source Fool.com