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PayPal jumped nearly 20% premarket today after Reuters reported that Stripe and private equity firm Advent International made a joint takeover offer of $60.50 per share, valuing the company at more than $53 billion. That's a 28% premium over Tuesday's close of $47.37. They first approached PayPal back in April, PayPal hasn't responded yet.
At its 2021 peak, PayPal was worth around $360 billion. The company that basically invented mainstream online payments, the original fintech, the Musk/Thiel launching pad is now being offered $53 billion. That's roughly 85% below its peak value. And the buyer is Stripe, a private company that didn't exist until 2010, currently valued around $159 billion, three times what it's offering to pay for PayPal. The disruptor became worth triple the pioneer, and now it wants to buy it.
The structure is interesting too. Stripe and Advent would own equal stakes and they've said they would keep PayPal intact. Keeping it whole suggests Stripe actually wants the assets operationally, PayPal's consumer network, Venmo's user base. Stripe is dominant in developer/merchant-side payments infrastructure.
Paypal has lost its value because of slowing growth, disappointing 2026 profit forecast issued back in January and years of Apple Pay and Google Pay eating checkout share and Stripe and Advent eating merchant infrastructure. Revenue still grew 7% to $8.35 billion last quarter beating estimates and total payment volume hit $464 billion, so this is definitely not a dying business.
A few things to note. The stock is trading around $56 now, below the offer price, which signals that the market has some doubt the deal will close as offered but shareholders who bought anywhere above $60 over the past few years may push the board to demand more. Second, two of the biggest names in online payments merging would get a hard scrutiny from regulators. Third, there's a crypto angle, Stripe owns Bridge, a stablecoin infrastructure platform and PayPal has its own PYUSD stablecoin so a combined entity would be one of the biggest stablecoin players.
So there are two questions which comes to mind. First, what does the board do here, take the $60.50, use the bid as leverage to push for more, or reject it and decide they can fix the company themselves.
And the bigger question, this deal can be interpreted in two different ways. One read: Stripe, one of the sharpest operators in payments, just signaled that legacy fintech has gotten too cheap. The other read: when a company born in 2010 can buy the original fintech pioneer at 85% off its peak that's proof the first generation of fintech didn't have a strong moat or they didn't change with the market.