PayPal Sinks as $50B Buyout Collapses

Stripe and Advent abandon $50B PayPal buyout; shares sink 15% while Affirm soars 13% on earnings.

According to 24/7 Wall St., PayPal Holdings stock dropped 15% to $52.45 in early Friday trading after Bloomberg reported that Stripe and Advent International walked away from an acquisition valued at more than $50 billion. Investor's Business Daily similarly reported that PayPal dives as the Advent-Stripe group drops its pursuit of the payments giant. The collapse of months of takeover speculation removes the most obvious near-term catalyst for the stock, leaving shareholders to absorb a sudden and steep revaluation with little warning.

24/7 Wall St. reports that PayPal stock had risen more than 40% this quarter on a combination of a second-quarter earnings beat and takeover speculation, and that one of those two supports has now disappeared. The publication also reports that PayPal's market cap sits at roughly $52.59 billion, close to the offer that was just withdrawn, which intensifies the sharpness of today's decline. According to 24/7 Wall St., Bloomberg first reported Stripe's interest in PayPal in February, and The Wall Street Journal reported in August that PayPal had found the initial bid insufficient and that the two sides were negotiating a higher price before the deal fell apart.

Both Investor's Business Daily and 24/7 Wall St. report that Affirm stock climbed on the day. 24/7 Wall St. reports Affirm stock rose 13% to $87.56 as investors reassess a competitive landscape that briefly looked like it might feature a Stripe-owned PayPal. According to 24/7 Wall St., CEO Max Levchin described the period as "our most profitable quarter ever, even without the tax allowance release." The publication also reports that Affirm and Shopify announced the launch of Shop Pay Installments in Australia, powered exclusively by Affirm, and that Affirm promoted Michael Linford to president.

24/7 Wall St. reports the Financial Select Sector SPDR ETF sat at $57.90 and was practically unchanged, confirming that banks, insurers, and diversified financials were not reacting to the PayPal news. The publication reports Klarna stock up 5% to $14.65 and Sezzle stock up 2% to $128.70, suggesting the BNPL cluster is trading on name-specific catalysts rather than as a bloc. Investor's Business Daily notes that Federal Reserve Chair Kevin Warsh's first Jackson Hole keynote speech left investors with ruffled feathers as he signaled elevated inflation will be in sharp focus at the next meeting. 24/7 Wall St. suggests watching whether PayPal stock finds a floor near its pre-speculation level from earlier in the quarter.