PayPal (PYPL) stock skyrocketed on Wednesday morning after Stripe and Advent sent in a $53 billion joint bid to buy the payment platform. The joint offer, submitted earlier this month, values PayPal at $60.50 per share, according to Reuters. PYPL shares are up 16% in the last 24 hours at the time of writing, adding to nearly 30% gains in the last 30 days.
The offer, submitted earlier this month, is backed by about $50 billion in committed financing from banks, said one of them. The offer represents around a 28% premium to PayPal’s closing share price on Tuesday. The proposal follows an initial approach made in early April, the sources said. Stripe and Advent have not received a response from PayPal and are seeking to advance discussions in the coming weeks, Reuters sources close to the bid said this week.
PayPal (PYPL) Stock Climbs: Will Stripe/Advent Bid Be Fruitful?
The two companies reportedly approached PayPal once before in April and are now looking to move discussions forward. Sources told Reuters that Stripe and Advent would own the company equally if a deal is completed, rather than breaking it into separate businesses. Earlier this year, new CEO Enrique Lores reorganized PayPal into three business units and reshaped the leadership team in an effort to streamline operations and improve growth. The company would likely receive a significant boost if a new takeover bid were successful.
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PayPal stock is down 18% year to date and 35% lower than one year ago. The payment platform faces competition from competitors like Apple (AAPL) Pay, Block (XYZ), Stripe, and buy now, pay later companies Affirm (AFRM) and Klarna (KLAR). Further, the stock has been unable to reclaim its 2021 all-time high of $310, set at the height of the pandemic amid a low-interest-rate environment. Should Stripe succeed in a PayPal takeover, the two combined could become a dominant force in the payment platform market, sending PYPL stock higher.
At press time, based on 24 Wall Street analysts offering 12-month price targets for PayPal (PYPL in the last 3 months, the average price target is $47.80 with a high forecast of $63.00 and a low forecast of $34.00. The average price target represents a -13.02% change from the last price of $54.96.