Offer price deep discount to PayPal’s 2021 peak of $308.52
Stripe and Advent International jointly proposed to buy PayPal Holdings Inc. for more than $53 billion, according to reports from Reuters and the Financial Times published Wednesday, citing unnamed sources. The news sent PayPal’s shares up more than 15% in premarket trading, with the stock reaching $54.57.
The cash and equity offer values PayPal at $60.50 a share, a near 28% premium to the company’s closing price Tuesday. But the offer price represents a steep discount to recent trading levels. PayPal’s stock traded at $78.22 a year ago, and its July 2021 peak of $308.52 — reached during the pandemic-era boom in digital payments — is more than five times the proposed price.
Stripe and Advent would jointly own PayPal under the proposed offer, with each holding an equal stake, Reuters reported. Neither PayPal nor Stripe immediately responded to requests for comment. Advent International declined to comment.
The proposed acquisition comes at a time of significant challenges for PayPal. MSI previously reported that the company’s core online checkout business has stalled, with new management warning investors that “significant changes” will be needed to fix the business. The company faces intensifying competition from Apple Pay, Shopify, buy-now-pay-later services and peer-to-peer payment apps. PayPal replaced CEO Alex Chriss with Enrique Lores in February, citing that the pace of change and execution had not met board expectations.
Fintech analyst Simon Taylor, author of the Fintech Brainfood newsletter, wrote on X that the challenge for the buyers will be “fixing messy internal systems” and that any acquisition could be a “distraction” for the already fast-growing Stripe. Thomas Hayes, chairman of investment management firm Great Hill Capital, wrote on X that the reported offer undervalued PayPal given its strong free cash flow and improving margins, adding that even an offer above $80 a share would present a “steep discount” to PayPal’s potential value.