PayPal’s Board Rejects Stripe and Advent Bid as $60.50 Offer Deemed Insufficient

Key Points

• The board reportedly finds the $60.50-per-share offer from Stripe and Advent International insufficient.
• The stock trades roughly 7% below the bid, near the price when the deal was announced.
• The average analyst price target sits near $53, below both the takeover price and the current share value.

PayPal (NASDAQ: PYPL) now has three distinct valuations. The private buyout group led by Stripe and Advent International offers $60.50 per share in cash. The market prices the stock at about $55. And the consensus analyst target hovers around $53, which is lower than both the offer and the trading price.

PayPal’s board recently added its own opinion, reportedly viewing the $60.50 cash offer as inadequate. The bid valued the payments company at more than $53 billion. The company has not publicly responded. Discussions are said to center on whether the price justifies even beginning negotiations.

Image source: PayPal.

For shareholders, the setup creates a tension. The stock is trapped between an offer that sits above the market and a consensus estimate that sits below it. Each figure signals something different.

Why the board views it as inadequate

The bid includes roughly $50 billion in bank financing and represents a 28% premium to the pre-bid trading price. PayPal rallied 17% the day the bid became public, closing at $55.52. That view implies the board believes the company is worth more than $60.50. Reports also suggest the bidders may increase their offer rather than walk away. Notably, prominent investor Michael Burry, a PayPal shareholder, has called the bid an opening offer and pegged the company’s intrinsic value much higher. The board appears aligned with that higher valuation.

Two prices below the offer

The market is less convinced. Near $56, the stock trades roughly 7% under the offer price, almost exactly where it settled when the bid was reported. That discount reflects the market’s pricing of risks: a collapsed deal, financing issues, or regulatory pushback. The bidders themselves have flagged possible antitrust remedies, including divesting PayPal’s Braintree business, signaling they expect regulatory scrutiny. If the deal collapsed, the stock would likely revert to its pre-offer level near $47.37.

Analyst consensus presents the harshest assessment. With an average target around $53—below today’s share price—the analysts imply that PayPal on its own is worth less than what the market is currently paying. The company trades at roughly 10 times earnings, yet its market capitalization of nearly $49 billion still falls below the $53 billion implied by the bid.

The company’s recent results underpin the skepticism. First-quarter revenue grew 7% year over year to $8.4 billion, and total payment volume climbed 11%. But transaction margin dollars—the company’s preferred profitability metric—expanded only 3%. Active accounts reached 439 million, a modest 1% increase from the year-ago quarter and a slight sequential decline, indicating that user growth has flattened. Management’s full-year guidance points to adjusted earnings per share ranging from a small decline to marginal growth.

The company’s fundamentals alone do not justify a premium valuation. The premium is entirely contingent on a buyer willing to pay it.

Here’s how the standoff might resolve. The board’s stance could signal an intent to negotiate, treating the initial bid as a starting point rather than a final offer. Yet the market’s 7% discount remains rational, as deals of this kind frequently unravel. Meanwhile, the analysts’ sub-$55 consensus serves as a reminder of the downside risk if PayPal must stand on its own numbers again.

The next major data point arrives quickly: PayPal will report second-quarter results on July 28. Strong results would bolster the board’s case that $60.50 undervalues the company. Weak results could shift leverage back to the bidders—or worse, remind investors why the stock languished near $47 previously.

For current shareholders, holding through the earnings report seems sensible for me. The active offer provides a bid floor for the shares, while the board’s posture could attract a higher proposal. I would not, however, rush to buy simply to capture the spread between $56 and $60.50; that 7% gap reflects the market’s assessment of financing, regulatory, and execution risks. If the deal falters, the analyst consensus already maps out the downside. If you hold the stock, do so because you have conviction in the underlying business and its long-term trajectory.

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