Payment service providers: PayPal negotiates with Stripe and Advent about acquisition

According to a media report, US payment service provider Paypal is in talks with fintech Stripe and financial investor Advent about a possible takeover. This was reported by the "Wall Street Journal" on Friday, citing insiders. Paypal's shares rose by 1.8 percent after trading. When contacted by the Handelsblatt, Paypal declined to comment on this.

Stripe stated that it would not comment on "rumors or speculation". There have been rumors of a takeover of Paypal, a pioneer in payment services, since the beginning of the year, but these have intensified since the summer. US competitor Stripe and financial investor Advent are said to have made an initial takeover offer of $60.50 per share or a total of $53 billion in July, according to media reports.

Since then, the company's shares have risen sharply on the stock exchange: since the reports of a purchase offer in July, Paypal's shares have risen by over 30 percent. However, the $60.50 per share is said to have been rejected by Paypal as a low offer. Investors such as short seller Michael Burry, known from the financial crisis, considered the offer too low and saw it as merely an opening offer.

According to the WSJ, the two sides have been negotiating a potentially higher price since then. A possible agreement could be reached in the coming weeks, but there is no guarantee.

Paypal's growth prospects have deteriorated. Paypal is one of the pioneers of digital payment traffic. The company was founded in California at the end of the 1990s. The founders and early employees included SpaceX CEO Elon Musk and investor Peter Thiel. During the pandemic, when many tech stocks rose in value, Paypal's stock price climbed to around $300, making the company temporarily more valuable than Mastercard.

Since then, however, Paypal's stock price has fallen sharply, also because the payment service provider had recognized many trends, such as mobile payments, too late. Currently, the shares are trading at around $62. PayPal still has around 440 million active customer accounts. However, the growth prospects had clearly deteriorated recently. At times, the stock had lost around 80 percent of its value since its record high.

When presenting the figures for the second quarter at the end of July, Paypal CEO Enrique Lores did not want to comment on the takeover rumors. However, he said that the company was open to objectively examining all opportunities that arose. The volume of payments processed rose by ten percent to $486.4 billion in the second quarter. The adjusted profit exceeded analysts' expectations at $1.38 per share.