According to Great Hill Capital's Thomas Hayes, PayPal (PYPL) presents a compelling buying opportunity despite recent investor panic. Hayes anticipates that as the initial negative reaction subsides, the company's aggressive stock buyback strategy will drive up share value. The market's initial reaction to the CEO transition has been bearish, but Hayes sees a potential turnaround.

Hayes points to the appointment of Enrique Lores, the former HP CEO, as a key catalyst. Lores is expected to replicate his successful strategy of share buybacks, similar to what he implemented at HP. With $6 billion in annual free cash flow, PayPal can retire up to 15% of its shares in the next year. The company is also sitting on $14 billion in cash.

This strategy is designed to boost the value of remaining shares. Hayes believes the market is misinterpreting the CEO change as a negative development, creating a buying opportunity. The current market volatility, with shares down over 18% on Tuesday, presents a chance for savvy investors.

Hayes draws parallels to Alibaba, suggesting that the current sentiment around PayPal mirrors the negativity faced by the Chinese e-commerce giant. He thinks that those who ignore the short-term noise and focus on the underlying fundamentals could see substantial gains. The stock buyback play is expected to make the remaining shares more valuable.