PayPal Holdings (NASDAQ: PYPL), the digital payments platform behind PayPal, Venmo and Braintree, reportedly fell sharply in pre-market trading on Friday, according to Benzinga and Seeking Alpha, after Bloomberg News reported that private equity firm Advent International and payments processor Stripe had abandoned their roughly $53bn buyout pursuit.
PayPal shares closed Thursday’s regular session at $61.47, down 0.55% on the day, having rallied more than 40% this quarter on takeover speculation. Benzinga and Seeking Alpha reported the stock fell around 12-14% in after-hours and pre-market trading once the news broke, though that figure has not been confirmed by an authoritative exchange feed.
Bloomberg, citing people familiar with the matter, reported that PayPal’s board viewed the consortium’s initial offer of $60.50 a share as insufficient, and cited regulatory and financing hurdles as further obstacles. Block, originally part of the consortium when talks began in April, had already exited before Stripe and Advent submitted a formal bid. The pursuit ran for more than five months before collapsing.
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The takeover chatter had driven the quarter’s rally, taking PayPal well off its 52-week low of $38.22 but still short of its 52-week high of $78.53. With deal-premium hopes now stripped out, attention shifts to PayPal’s standalone business, including cost discipline and Venmo growth.
Thomas Hayes, portfolio manager at Great Hill Capital, said: “Kudos to the $PYPL board… for not allowing them to steal meaningful upside from current owners.”
Bloomberg’s sourcing indicated the situation remains fluid, with Advent and Stripe potentially able to return with a fresh approach at a later date.
