GURGAVIN
Technology Investor, Event-Driven Trader
PayPal is worth much more than Stripe's reported $53 billion takeover offer, and its board reportedly rejected the bid as inadequate. PayPal makes over $5 billion a year and is growing, buys back about 7% of its shares annually, and traded at just 9x earnings before the news and 11x the offer. $75 a share should be the bare minimum, and a bidding war may follow. x.comÂ
PayPal is worth more than Stripe's potential $53B takeover offer at $60.50 a share, so the board is unlikely to accept and a bidding war could start. PayPal earns over $5B a year and growing, buys back 7% of the company each year, and traded at just 9x earnings before the news and 11x the offer. $75 should be the bare minimum. Kalshi puts the chance of an acquisition this year at 69%. x.comÂ
PayPal's raised earnings and free-cash-flow guidance supports rejecting Stripe and Advent's $60.50-per-share offer. The shares now trade around $57, below the rejected bid, but that does not make the rejection a mistake. x.comÂ
PayPal should hold a floor now that Stripe's dropped $60.50 offer put a value on it, making a return to the $30s unlikely. The very lows should be the low to mid $40s; with nearly 500 million global daily active users, it looks too cheap for an acquirer to pass up, and it could make Elon Musk's X a force. Without more takeover talks, though, it could bleed lower to fill the gap toward its $47 pre-bid price. x.com x.comÂ
PayPal's near-flat growth and rising checkout competition leave it a Grade C, prove-it story. Q3 FY26 revenue rose just 2%; operating income fell 8% as restructuring charges rose from $69 million to $255 million, and net income fell 14%. The business still earns over $1 billion a quarter, but it is treading water. x.comÂ
PayPal's large put-selling accumulation now has an explanation: Stripe and Advent have offered to buy it for $53 billion, per Reuters. The stock also fits a hardware-to-software rotation theme. x.comÂ
PayPal offers a low-probability but very high-reward asymmetric setup, as Stripe's now-dead $60 offer left long-dated options dirt cheap. January 2028 call volatility sits near a historically low 23%, so even a return to average would move premiums sharply. The new CEO's incentives start unlocking at $83 and rise to about $123, with progress likely expected within 12-15 months. A turnaround to $100+ is hard after recent years; the stock sits above key moving averages, near a golden cross. x.com … Show more
PayPal is a low-switching-cost, low-moat business headed for secular decline as payment fees race to the bottom. In 2021 it wanted to buy Pinterest for $45B; now Stripe reportedly wants to buy it for $53B. Stripe is probably the best suitor by far, as a good tuck-in acquisition. x.com x.comÂ
PayPal's selloff makes it even more attractive to a strategic buyer. The stock trades at about $5 per share of 2026 EPS guidance, yet is being dumped because the long restructuring timeline leaves "no urgent reason to buy it." x.comÂ
PayPal's beat-and-raise quarter supports the bull case. Per @DeItaone, Q2 EPS was $1.38 versus $1.28 expected, revenue $8.68B versus $8.47B and payment volume $486.5B versus $468.5B, and full-year adjusted EPS guidance rose to about $5.38. PayPal plans $6B of buybacks this year and at least $1.5B of cost savings over 2-3 years, though it expects a low-single-digit decline in Q3 adjusted EPS. x.comÂ
PayPal is better off sold, because management has been unable to use the company's data while Stripe and Advent can. Even at Stripe's $60.50 acquisition price, most PayPal investors will still be in the red; only those all in at the bottom would make about 50%, while most AI names have risen much more. Selling losers is the better path. x.com x.com x.comÂ
PayPal is bound to catch up to its true worth sooner or later, trading under 10x trailing EPS on 40% annual growth, with a ton of free cash flow and an EV/EBIT around 6. Next week's earnings are the checkpoint for a possible long-term position. x.comÂ
