Stock Market Today, Aug. 28: PayPal Falls 13% After Stripe and Advent Abandon $50B Takeover
PayPal Holdings (NASDAQ:PYPL), a digital payments and consumer/merchant transaction platform, closed at $53.66, down 12.71%. Shares fell after reports Stripe and Advent abandoned their reported roughly $50 billion takeover pursuit; investors are watching turnaround execution. Tra
A consortium led by buyout firm Advent and payment processor Stripe has abandoned its pursuit of fintech giant PayPal Holdings, a potential deal that would have been one of the largest leveraged buyouts in history, according to sources. The group, which had previously offered over US$50 billion for the company, is no longer interested in acquiring PayPal, sources close to the matter revealed.
The bid, which was a fraction of PayPal's roughly US$360 billion valuation during the height of the Covid-19 pandemic in 2021, was reportedly insufficient for the company. PayPal, founded in the late 1990s, has been facing challenges in modernizing its payment technologies as rivals like Apple and Alphabet have gained market share.
The acquisition interest, combined with strong second-quarter earnings that surpassed analyst estimates, led to a significant recovery in PayPal's stock price. The company's market value has surged to approximately US$52.6 billion, a 40% increase over the past quarter. Despite the withdrawal of the bid, PayPal has shown resilience by implementing changes such as management reshuffles, workforce reductions, and a renewed focus on higher-margin products.
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