The former $360 billion giant is no longer in glory. Pay Pal receives a $53 billion acquisition offer
Digital payments pioneer PayPal recently received a joint acquisition offer from financial technology company Stripe and private equity giant Advent International. The other party plans to acquire PayPal at a price of US$60.50 per share, with an overall valuation of more than US$53 billion. The offer represents a premium of about 28% to PayPal's closing price on Tuesday. The offer was submitted earlier this month and is backed by about $50 billion in committed bank financing, according to people familiar with the matter. According to the proposal, Stripe and Advent will jointly own PayPal, with each party holding a half share, rather than splitting the company. However, PayPal has not yet responded to this. The two parties hope to advance negotiations in the next few weeks, but there is still uncertainty whether the transaction can ultimately be reached. The acquisition offer highlights PayPal's predicament of falling from its peak in recent years. This payment pioneer, founded in the late 1990s, enjoyed the dividends of online payments during the epidemic, and its market value hit a peak of approximately US$360 billion in 2021. However, with With the strong rise of payment and other competitors, PayPal has gradually stalled in the fierce market competition. Over the past five years, its stock price has fallen by approximately 84%. As of Tuesday, the company's market value has shrunk to about $40 billion. After the news was announced, PayPal's stock price surged more than 17% in early trading on Wednesday, reflecting the market's initial positive reaction to the deal. However, Michael Burry, a well-known investor and prototype of "The Big Short", publicly stated that the bid of $60.50 per share was too low. He believed that PayPal's true intrinsic value was between $75 and $115 per share. Some analysts also believe that PayPal's new CEO may not easily accept this offer.