PayPal (PYPL) jumps 15% on Stripe, Advent $53bn takeover bid

PayPal Holdings (PYPL) shares rose about 15 per cent in premarket trading on Wednesday after Reuters reported that Stripe and Advent International had offered $60.50 a share for the payments group. The proposal values PayPal at more than $53 billion and puts the price 28 per cent above Tuesday’s close.

Reuters, citing people familiar with the matter, said the two bidders would each own an equal stake if the transaction is completed. Banks have committed roughly $50 billion in financing, according to the report. PayPal had not responded to the approach, leaving its board to decide whether the price is fair compensation for handing control of one of the sector’s biggest listed companies to a private consortium.

The bid is larger than a simple stock-moving headline. A joint Stripe-Advent purchase would keep PayPal intact rather than carve it up, placing a consolidation bet on whether a slower-growth payments incumbent can be worth more in private hands than public investors have allowed. The financing points the same way: a control deal, not a small strategic tuck-in.

Price and bargaining power

A 28 per cent premium is large enough to demand board attention. It may not settle the valuation argument. MarketWatch reported that Michael Burry said PayPal’s intrinsic value sits between $75 and $115 a share and that a winning bid should be closer to $100. Directors now face a plain choice: take a financed premium, or keep betting that PayPal’s user base, merchant network and branded checkout franchise can recover in the public market.

PayPal’s operating record cuts against the bull case. In the same MarketWatch report, Morgan Stanley analysts led by James Facuette said the company still faces deep problems across branded checkout, Venmo and its Braintree payment-service-provider business.

“We continue to think that the challenges facing PayPal across its Branded, Venmo, and Braintree/PSP businesses will be very difficult to overcome”

Morgan Stanley analysts led by James Facuette, via MarketWatch

That split explains the sharp move in the stock. Event-driven traders have a near-term reference price. Long-only holders have a harder calculation: whether the reported offer is a genuine clearing level or just the first serious number after months of strategic drift. For now, both groups are trading probabilities rather than a signed agreement.

Turnround still in progress

Timing may be part of the appeal for Stripe and Advent. MarketWatch said PayPal named a new chief executive in March and split its operations into three divisions in April. Those changes were meant to speed a turnround at a company that has struggled to convince investors it can restore durable growth. A bid now suggests outside buyers see value in moving before the overhaul is either validated or rejected by reported results.

The pressure is not limited to reporting lines. TechCrunch reported in June that PayPal planned to cut about 20 per cent of its workforce over the next two to three years as part of an AI-centred turnround strategy. That made the reset more drastic than routine cost trimming. For Stripe and Advent, the wager is that PayPal’s assets could be worth more under different ownership, with more room to execute away from quarterly scrutiny.

The next step is a board process and a financing test. PayPal’s directors have to decide whether $60.50 a share properly reflects the company’s place in global digital payments. Stripe and Advent have to show that a $50 billion financing package can carry the proposal from headline to signed deal. Until there is a response, the stock will trade on the gap between a reported offer that looks real enough to reprice the shares and a final valuation still open to negotiation.