PayPal invested $500 million in Uber's IPO. The company has lost $215.7 million on that investment since.

• PayPal invested $500 million in Uber's May IPO.
• Since, Uber's stock price has fallen more than 40%, erasing $215.7 million from PayPal's original investment.
• The loss weighed on PayPal's third-quarter earnings, and the company said it would change its accounting methodology to exclude the impact of such investments in the future.
• Read more on Business Insider.

Uber's plummeting share price is not good for PayPal.

That's because the payments company invested $500 million in Uber's May initial public offering, when it bought 11.1 million shares at $45 a piece, according to Uber's prospectus.

Now, those shares are worth about $284.2 million, meaning that the roughly 42% drop in Uber's stock price has erased $215.7 million of PayPal's investment in just a few months.

Uber has long struggled to gain investor confidence, but its share price has been hit with double bad news in early November. On Monday, November 4, the company reported disappointing third-quarter earnings, sending shares down 9.85% on Tuesday to a record low.

Then, on Wednesday, November 6, Uber's post-IPO lockup expired, meaning millions of shares became eligible to trade on the market. Uber fell as much as 8.7% during the day to another record-low share price of $25.58.

The investment in Uber weighed on PayPal even before the losses in November. During the company's third-quarter earnings call in September, PayPal Chief Financial Officer John Rainey said that strategic investments in Uber and MercadoLibre, an online marketplace company, added up to an unrealized loss of about 18 cents per share.

That's created more earnings volatility for the company, Rainey said. Starting in 2020, PayPal will update its non-GAAP methodology to exclude the impact of these investments and their gains or losses, he said.

"We believe this will provide a better understanding of our operating performance and a more meaningful comparison of our results between periods," Rainey said.

Uber is down 42% year-t0-date.

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