The Few Bets That Matter
Concentrated Equity Investor, AI Infrastructure
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 a bad stock because the market rewards top-line growth, and investors have to follow what the market likes rather than insist it should value profitability. A replying post argues that over 90% of companies will never match PayPal's profitability and cash generation, but that does not make the stock worth owning. x.comÂ
PayPal's cost cuts and reserve releases prop up short-term numbers, while investing for growth wastes time. Its slow bleed gives delusional bulls hope, making it the ultimate value trap; it should not be a public company. 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 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 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 growth has stalled and it faces too much fintech competition. That view could change if the company adapts, pivots and proves otherwise. 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 standalone turnaround plan is unlikely to work because its new focus areas are the same ones it has failed at for years. Per @wallstengine, CEO Enrique Lores is pursuing the plan after Stripe and Advent's $50B+ takeover talks stalled, focusing on expanding Venmo into a broader financial app, improving checkout and cutting billions in costs. x.comÂ
PayPal is worth over $100 a share, but its current board will not get it there. x.comÂ
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 faces structural disintermediation as agentic commerce and ecosystem wallets like Apple Pay and Google Pay erode its role as a checkout intermediary. Branded checkout grew just 1.0% in Q4 2025, a sign it is losing the buy button, despite over $6B of annual free cash flow. CEO Enrique Lores is pivoting to agentic infrastructure with ChatGPT, but with a $9B refinancing looming, PayPal looks a value trap until AI-first growth outpaces Apple and Google. x.comÂ
