After Rejecting the $53 Billion Acquisition Offer, What Cards Does PayPal Have Left?

By: Zennon Kapron, Forbes

Compiled by: Saoirse, Foresight News

Rejecting Stripe's acquisition was merely the easiest step; the subsequent transformation battle is long and arduous. PayPal's rejection of the $53 billion privatization offer gives this choice a quantifiable benchmark: the long-term value generated by the company's independent operations must exceed the total cash offered by Stripe and Advent. And tonight (July 28) is the day PayPal faces its first round of market validation.

Reuters disclosed on July 15 that Stripe and Advent International offered an acquisition price of $60.50 per share, with a total transaction size of approximately $53 billion, planning to privatize PayPal. This offer represents a 28% premium over the closing price of the trading day prior to the disclosure of the acquisition news. The acquirers secured a specialized bank credit facility of approximately $50 billion; upon completion of the transaction, the two acquirers will split the equity equally. According to reports, the acquirers have no plans to split PayPal. The PayPal board made the resolution to reject within a few days and officially announced the rejection of the acquisition on July 20. In this transaction, Goldman Sachs and Evercore provided advisory services to PayPal. Sources indicate that the board's internal expectation for a reasonable offer was close to $70 per share.

Rejecting the $53 billion acquisition means the board believes that the existing management executing the company's current strategy can create value exceeding $53 billion for shareholders. But this confidence must be supported by performance, after all, the root cause of PayPal's stock price falling to $47.37 per share is precisely the long-term unsatisfactory operational performance.

PayPal's stock price touched a high of $305.88 on July 23, 2021, corresponding to a market cap close to $360 billion. When the acquisition offer landed, PayPal's market cap was only about $44 billion, shrinking by nearly 90% from the high; in contrast, throughout the entire payment industry, transaction volume continues to maintain growth.

The Underlying Logic Behind the Acquirers' Willingness to Enter at a High Price

Stripe never casually throws out acquisition offers. In 2025, the company's total annual transaction processing volume reached $1.9 trillion, up 34% year-over-year; in the equity subscription transaction for internal employees in February 2026, Stripe's valuation reached $159 billion. The company spent $1.1 billion to acquire stablecoin infrastructure company Bridge, while incubating the payment blockchain project Tempo. Tempo received a total of $500 million in financing from Thrive and Greenoaks, with a post-money valuation of $5 billion. Since 2008, Advent International has cumulatively invested over $7.8 billion in 18 payment and fintech companies, with investment targets including Worldpay, Nets, and Nexi. The institution's industry research report cites the example of Worldpay and Vantiv growing into industry leaders after being spun off independently, substantiating that payment segments can grow into global leading enterprises after separating from parent companies; this logic happens to fit PayPal perfectly.

Combining various public reports, one can clearly identify the acquirers' core demands: the PYUSD stablecoin covering 70 global markets, the PayPal branded checkout system, Venmo, and as KBW analyst Sanjay Sakhrani said, PayPal possesses unique user data advantages in the agent commerce track. The acquirers are willing to offer a high price, essentially betting that PayPal can become the traffic infrastructure for a new wave of payments. But the PayPal board holds a different view, believing these values can be fully explored and realized by the company itself. However, the operational report card of the past five years makes it difficult for the market to easily accept this argument.

Five Years of Frequent Strategic Reversals, Continuous Loss of Market Confidence

Looking back to October 2021, news emerged that PayPal planned to acquire Pinterest at approximately $70 per share, with a total transaction size of about $39 billion. After the news was exposed, PayPal's stock price fell immediately; when PayPal finally abandoned the acquisition, pre-market stock price surged over 6%. The market's joy at the shelving of a major strategy is enough to show that investors were not optimistic about this acquisition plan.

In February 2022, management's strategy failed again. Previously, the company set a long-term goal of 750 million active accounts, but declared abandonment directly one year later; the company also disclosed the existence of 4.5 million fake accounts on the platform and lowered full-year revenue expectations. Under the impact of multiple negative factors, PayPal's stock price plummeted 25% in a single day, hitting a 52-week low. The grand vision of building a one-stop super app also vanished along with the user growth target.

In August 2022, activist investment firm Elliott Management entered the scene, spending $2 billion to purchase PayPal shares and proposing a value reshaping plan. But in just one year, this firm liquidated all its holdings. Activist investors do not easily give up value-added plans with implementation value; exiting entirely is itself a negative signal.

Alex Chriss took office as CEO in September 2023, claiming that the first innovation launch event he led would stun the industry. The market was full of expectations, driving the stock price up over 10% within a week; but the launch event only introduced several mediocre products such as Fastlane login-free checkout, consumption cashback, and smart billing, and the stock price fell about 4% on the day of the event. On February 3, 2026, branded checkout business growth fell back to 1%, and the board dismissed Alex Chriss. Chairman David Dorman explained: "The speed of transformation promotion and implementation efficiency did not meet the board's expectations." Enrique Lores, formerly of HP, took over as CEO. In less than three years, PayPal welcomed its third resident CEO, during which CFO Jamie Miller had temporarily taken over company operations.

In 2019, PayPal spent $4 billion to acquire the coupon cashback plugin Honey, an acquisition also worth reviewing. At that time, the company positioned Honey as an e-commerce growth and data mining engine, but in December 2024, numerous exposures pointed out that Honey privately modified affiliate promotion codes, intercepting content creators' promotion commissions. In January 2026, class action plaintiffs submitted an amended complaint. Regardless of how the court ultimately rules, this acquisition never fulfilled the revenue value promised initially.

The acquirers saw through PayPal's long-standing chronic illness: strategies frequently announced and frequently overturned, management successive changes, repeating in a cycle. In these five years, PayPal never lacked quality assets; what was lacking was a long-term strategy that could be stably implemented and run continuously for more than two years.

Breaking Down Operational Data: Main Business Growth Sluggish, Profits Rely on Low Gross Margin Business

The latest operational data shows that PayPal's core quality business growth is weak, value is constantly consumed, and most new performance comes from segments with lower profit margins. In 2025, the company's total revenue was $33.2 billion, up 4% year-over-year, with total annual transaction processing volume of $1.79 trillion. Excluding the impact of exchange rate fluctuations, PayPal's core business that is its foundation, branded checkout, grew only 1% in the fourth quarter of 2025, and 2% in the first quarter of 2026; unbranded white-label payment business Braintree growth reached 11%, but this business has weak bargaining power facing large enterprises, and partners continuously squeeze profit margins every year.

User share data highlights the survival crisis. Bernstein calculations show that PayPal's market share in US digital wallets fell from 90% in 2017, 50% in 2023, all the way down to about 40% currently; Apple Pay market share is close to 20%, Shop Pay compound annual growth rate is about 30%. As of the end of March 2026, PayPal's total active account number was 439 million, compared to December 2022 with a net increase of only 4 million. In four years, global e-commerce added hundreds of millions of consumers, while PayPal user growth was nearly stagnant.

Management's 2026 performance guidance is cautious: transaction-related profits slightly decline, adjusted net profit is likely to decline slightly, at best barely flat. In the past twelve months, PayPal cumulatively spent $6 billion to repurchase stock, with a total repurchase volume of about 100 million shares. Motley Fool analysis states that according to the current repurchase pace, PayPal can complete the repurchase of all outstanding stocks by 2032 at the earliest. Companies repurchasing shares in large amounts often do so because management cannot find investment directions with higher returns. The market has also given corresponding pricing: the current stock price corresponds to a forward P/E ratio of only 8.5 times.

The Confidence and Hidden Dangers of the Board Resisting the Acquisition

The logic for being bullish on PayPal truly exists, which is also the reason why acquirers are willing to offer a premium and the board dares to hold firm for a higher offer, even if this persistence may ultimately be proven mistaken. Venmo revenue in 2025 was $1.7 billion, up about 20% year-over-year, monthly active users 67 million, debit card transaction volume increase reached 50%; in October 2025 PayPal reached a cooperation with OpenAI, PayPal wallet accessed ChatGPT one-click payment function, seizing first-mover advantage in the agent payment track; PYUSD stablecoin market cap touched a high of $4 billion in March 2026.

But these key assets hide dangers. PYUSD market cap shrank by one-third after the March high, leaving only about $2.8 billion, while the stablecoin infrastructure layout by the acquirers continues to expand steadily; ten years after Venmo went viral, PayPal only explored a mature commercialization path; ChatGPT payment cooperation has no exclusive barriers, OpenAI has established cooperation with the vast majority of payment service providers.

Investor Michael Burry, who holds a heavy position in PayPal, believes that $60.5 is just the starting price for acquisition, and the company's reasonable valuation is close to $100 per share. Cantor Fitzgerald used the sum-of-the-parts valuation method to calculate, PayPal's reasonable valuation is about $70 per share, matching the board's target price. These valuation judgments may hold, but there is a core question that remains unsolved: On what basis can a company that frequently encountered pitfalls and lacked execution power in the past five years push the current price of $47 per share to $100? Quality assets that cannot be implemented and monetized ultimately belong to the party that can achieve commercial implementation; and the acquirers' implementation execution power in recent years is far superior to PayPal.

Tonight, the Earnings Report Exam Deciding the Choice

PayPal will release its second-quarter earnings report tonight (earnings report expected to be released Beijing time July 28 18:00–19:00, earnings conference call starts at 20:00). This performance report is equivalent to the market's public judgment on the major decision of "rejecting the acquisition". Enrique Lores must deliver clear and bright results: branded checkout business returns to accelerated growth, Venmo maintains steady expansion, and at the same time clearly explain how PYUSD and agent payment cooperation will be implemented to generate revenue. Not only does this quarter need to meet standards, but every quarter in the coming years must deliver growth; only thus can it prove that the long-term value of independent operations exceeds $53 billion. Enrique Lores officially took office only in March this year, having led the company for only five months.

The first-quarter earnings report has already exposed the current trust dilemma: revenue was $8.4 billion, up 7% year-over-year, exceeding market expectations, but the stock price remained weak, the root cause being management's performance guidance remains conservative. This is the vicious cycle brought by lack of credibility: even if earnings data exceeds expectations, the market will discount it heavily; management's strategic commitments, investors directly choose to ignore. Valuation continues to be under pressure, until acquirers use cash to give an offer to break the deadlock, exactly as Stripe and Advent did. But the board chose to reject, betting on the new CEO's brand new strategy built in the short term, shareholders have not yet seen a complete and implementable execution plan.

Stripe and Advent can completely wait patiently. The entire financing plan has been prepared, the commercial logic of the acquisition will not decay with time; as long as PayPal's subsequent quarterly performance continues to be sluggish, shareholders will become increasingly inclined to accept the acquisition. In the past five years, PayPal has fully proven: holding quality assets, and converting assets into stable and continuous earnings, are two completely different capabilities. Now the board is betting with the equity of all shareholders worth $53 billion, betting that PayPal finally acquires the ability to monetize assets. The currently visible chips are only this CEO who has just taken office for 20 weeks, and a transformation plan not yet fully disclosed to shareholders. Starting from July 28, the market will verify quarter by quarter whether this confidence can hold water.