Back in July, PayPal rejected an offer of $60.50 a share. The bid put a $53 billion price tag on the business, and even that wasn’t enough to get a deal done.
According to the Wall Street Journal, Stripe and private equity firm Advent International are in talks to acquire PayPal. The parties are now weighing a potentially higher price per share, and if the negotiations hold together, an announcement could land in the coming weeks.
Could. The talks might still fall apart. The number that explains why PayPal is a target
Ahead of the offer, PayPal shares were sitting at historic lows and the company was worth roughly $40 billion, per the Journal. At the height of the COVID pandemic, its valuation was about $320 billion higher.
That single comparison is the entire story. A stock that defined the lockdown era has fallen far enough that a private buyer and a competitor can plausibly bid for the whole thing.
And the board still said no to $53 billion — which suggests the people running PayPal believe its floor sits higher than the market thinks.
What Stripe would actually get
Stripe and Advent would each take an equal stake and become PayPal’s joint owners, Reuters reported in an earlier piece on the offer. Breaking PayPal up isn’t part of the plan.
That detail carries more weight than the price does. Buyers who intend to sell a business off in pieces usually say as much, or at least leave the option open. Keeping PayPal intact signals that the goal is scale rather than asset sales.
Reuters put the merged company’s annual payment volume at around $3.7 trillion, which would place Stripe among the largest online payment companies anywhere.
The Visa and MasterCard problem
The strategic reasoning runs like this. As Reuters explained, a Stripe-PayPal merger could shrink Stripe’s dependence on Visa and MasterCard.
Every card payment Stripe handles today travels over rails it doesn’t own, at fees it has no say in. PayPal arrives with a balance-to-balance network of its own and a consumer base that already parks money inside it.
Stripe would also be free to fold Venmo, PayPal’s checkout system and its crypto features into its own product stack. Venmo is the piece Stripe has never possessed: a consumer brand people ask for by name.
What this does to the turnaround already underway
PayPal installed a new CEO in March, Enrique Lores, who has been working to turn the business around. Lores carved the company into three units — one for checkout, one for Venmo and one for payments and crypto.
Whether that structure would survive an acquisition is unclear.
What’s worth noting, though, is how cleanly those three units line up with the assets Stripe reportedly wants. Checkout, Venmo, crypto. A company organized into exactly the pieces a buyer would want to absorb is a company that’s easy to absorb.
What to watch
Price per share is the figure to follow. July’s $60.50 was rejected against a market value of roughly $40 billion, meaning PayPal’s board was holding out for a premium well beyond the one already on the table.
Whatever number surfaces over the coming weeks is the real signal. If it comes in meaningfully above $60.50, Stripe wants this badly enough to overpay for a business the public markets had written down. If the talks simply go quiet, PayPal’s board has decided it can fix itself faster than any buyer could.
