PayPal (PYPL) is soaring on a report that Stripe and private equity firm Advent International offered to acquire the payments giant for more than $53 billion.
The reported interest signals that PayPal’s vast user base, trusted brand, and payments infrastructure remain highly valuable despite years of slowing growth and mounting competitive pressure. Said pressure has been fierce, fueled by Stripe itself, Revolut, Klarna (KLAR), and Affirm (AFRM).
Affirm founder Max Levchin detailed the situation at PayPal in a recent episode of the Power Players with Brian Sozzi podcast (video above) when we asked him whether he would be interested in buying Venmo from a wounded PayPal to help boost Affirm’s growth efforts.
“In general, we’re a reasonably large public company at this point, so theoretically we should be at least eyeing M&A,” said Levchin, who co-founded PayPal along with Tesla (TSLA) and SpaceX (SPCX) CEO Elon Musk, LinkedIn founder Reid Hoffman, and other Big Tech names.
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“And it’s not like we’re asleep at the switch,” Levchin added. “We’ve looked and are looking, but it’s very hard to justify the dilution or the cash expense, really, if you can grow as fast as we do just by building stuff. And M&A is, generally speaking, not a high probability of success in most cases.”
He concluded that “the bar to say, ‘OK, let’s dilute ourselves and our shareholders because that makes so much sense’ — that’s a very high bar for us.”
For Stripe, a deal would instantly add one of the world’s largest consumer payment platforms, including Venmo, while expanding its reach beyond merchant payment processing.
Privately-held Stripe is currently valued at $180 billion, making it the third-most-valuable private company, behind OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT).
The reported bid of $60.50 per share represents a sizable premium to PayPal’s recent trading price, but it’s also light-years removed from its record high of around $300 in 2021. A PayPal spokesperson didn’t immediately return Yahoo Finance’s request for comment.
The reported offer coincides with new PayPal CEO Enrique Lores moving fast to slash costs, overhaul the management team, and rebuild growth.
Given how the competition has deeply impacted PayPal, the Stripe team would be wise not to overpay for the aging legacy player.
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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