PayPal shares fell about 12% on Friday after reports that Stripe and private-equity firm Advent International had abandoned their attempt to acquire the digital-payments company for approximately $53 billion. The decline erased part of a takeover-driven rally and forced investors to reassess PayPal without the prospect of an immediate buyout.
The consortium is no longer pursuing a transaction, according to people familiar with the private discussions. PayPal, Stripe and Advent declined to comment, and no binding acquisition agreement had been announced.
The bidders could potentially return later, but there is currently no confirmed offer or active takeover process.
How far did PayPal stock fall?
PayPal traded near $54.13 late Friday morning, down $7.34, or 11.94%, from Thursday’s $61.47 close. The stock opened at $53.74 and moved between $52.62 and $54.76.
Nearly 18 million shares had changed hands by late morning, above the average daily volume of about 15.7 million. PayPal’s intraday market value fell to approximately $46.3 billion.
Friday price reflects the reported market level at approximately 10:49 a.m. EDT. Prices can change during trading.
The sell-off reflected the disappearance of a possible takeover premium. PayPal stock had risen more than 40% during the quarter as investors anticipated an acquisition at a higher price.
What did Stripe and Advent offer?
Stripe and Advent reportedly offered $60.50 per share in July, valuing PayPal at approximately $53 billion. PayPal considered the proposal insufficient, and discussions continued over whether the consortium would raise its price.
By Thursday’s close, PayPal was trading at $61.47—above the reported offer. Proceeding would therefore have required a higher proposal carrying a premium over the market price.
The reason for abandoning the pursuit has not been officially disclosed. Valuation differences, financing requirements and possible regulatory scrutiny were among the issues surrounding the transaction.
A report on the PayPal takeover withdrawal said the company’s board had previously regarded the $60.50-per-share offer as inadequate.
How the takeover interest developed
Reports in February said Stripe was considering buying part or all of PayPal after a prolonged stock decline reduced the company’s valuation. Stripe and Advent later joined forces and submitted their reported July proposal.
Further reports in August said PayPal wanted a higher price and negotiations were continuing. The latest development indicates those talks ended without an agreement. Because the discussions were private, additional proposed terms remain undisclosed.
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Why PayPal attracted potential buyers
PayPal processes nearly $2 trillion in annual payment volume, serves just under 440 million active accounts and owns Venmo, a major US peer-to-peer payment service.
An acquisition could have given Stripe access to PayPal’s consumers, merchants and recognised checkout brand. Advent brought private-equity experience and a history of investing in payment companies.
The proposed deal would have ranked among the largest fintech acquisitions. It follows other major investments, including Apollo’s Atlantic Aviation transaction at a valuation near $10 billion.
Why PayPal faces pressure
PayPal’s growth slowed after the pandemic-era expansion in online shopping eased. Its branded checkout business faces competition from Apple Pay, Google Pay and payment options integrated into smartphones and retail platforms.
The stock remains far below its 2021 high above $300, when PayPal was valued at more than $280 billion. Its 52-week trading range is $38.46 to $79.21.
Turnaround plan returns to focus
CEO Enrique Lores, who took charge in March, is overseeing a reorganisation focused on checkout, consumer financial services and payment processing. The structure could improve accountability or make a future separation easier, although no spinoff has been announced.
Companies are increasingly reviewing which operations they want to retain, as seen in Shell’s potential multibillion-dollar US chemicals transaction.
PayPal is targeting $1.5 billion in gross annualised savings over the next two to three years. Second-quarter revenue increased 5% to $8.68 billion, and the company raised its profitability outlook.
Investors will now watch checkout growth, cost reductions and profit margins. Another bidder could emerge, but PayPal’s near-term valuation will depend mainly on whether management can convert its large customer base and payment volume into stronger growth.
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