Stripe and Advent Team Up to Buy PayPal for Over $53 Billion
Stripe, Advent offer to buy PayPal for more than $53B
Stripe and private equity firm Advent International have jointly offered $60.50 per share to acquire PayPal, valuing the payments giant at more than $53 billion. This proposal, backed by $50 billion in committed financing, represents a 28% premium over recent share prices. The deal aims to keep PayPal intact with equal ownership stakes, addressing the company's recent struggles with slowing growth and intense competition from rivals like Apple Pay and Google Pay.
PayPal has lost more than 40% of its market value over the past 12 months, wiping out much of the value it gained during the pandemic.
- chirau
That would be quite a play. Stripe, PayPal, Venmo, Braintree, Xoom all under one umbrella. The Herfindahl-Hirschman Index (HHI) for online card-not-present (CNP) checkout on that is going to be absurdly high and this will take a lot of convincing to beat antitrust. They will probably have to unwind Venmo and Braintree.
- khurs
The future is direct payments without middlemen.
So consolidation of these legacy players is not unexpected - their revenue whilst sizeable is going to continually decrease every year as people use cards less (Many countries have/are rolling out their domestic app2app or bank2retailer payment system).
- charlieyu1
PayPal user for 20+ years and it is time to end that dross
- edoceo
Not good. Stripe makes restrictions that PayPal allows (cannabis adjacent, adult adjacent) that Stripe blocks. Many vendors will be negatively impacted by Stripes morality police and selective application of their policies.
- nickjj
I'm not sure I like this idea. Braintree is a legit competitor to Stripe. I'm guessing they have some informal agreement to keep transaction fees about the same but if they become 1 company, what's to stop Stripe from raising fees even more?
I'm not a fan of either to be honest, PayPal once told me I was wrong with something related to taxes and a bunch of different reps told me what I was saying and reported was impossible. Their tax division specialists also replied by email with big bold red letters outlining how it's not possible and that I'm wrong multiple times. They were contacted through support cases I opened with other reps on the phone since they aren't directly accessible on phone.
Then I said I was canceling my account with them if this wasn't resolved since it would have resulted in me needing to pay $400 to have my taxes amended. Long story short, after being ghosted for 3 months they replied to me saying I was right and they indeed had the impossible problem, then fixed their tax forms a week before taxes were due.
It's really bad that a random person on the internet discovered a huge issue with one of their partners and their instinct was to require ~10 hours of back and forth phone calls, multiple emails, me giving them the likely problem and solution on day 1 only to be lead on and ignored for months until the very last second.
- mertbio
Paypal is quite popular in Germany but with Wero that popularity will decrease significantly. I expect that all around the Europe.
- hibikir
What I find weird about this is that JohnC has been saying for decades that large mergers are pretty bad for both companies. You spend 2,3 years in limbo, figuring out what in the world to do with the other large organization. When Stripe makes acquisitions it's historically been small companies, doing things Stripe isn't doing. It's the kind of situation where pc is unlikely to speak publicly here, but I sure would love to understand what the plan is, if just as a shareholder.
- ceautery
If I worked for PayPal right now I'd be printing résumés. Stripe recently laid off 300 of their IT people. To paraphrase Petey Greene, I wouldn't trust them to wash my car.
- benmorris
I'm not sure how this is a good thing. There are already very limited options to accept payments online, consolidating two of the major ones is not a great thing.
- elevation
I typically use paypal for paying contractors, but try to "load balance" across a couple competitors because you never know when one of them will flag your account, nor for how long it will be flagged.
Consolidation in this industry puts my ability to transmit money at greater risk.