Michael Burry Calls Reported $53B PayPal Buyout Offer 'Simply Too Low'

Investor Michael Burry has publicly criticized a reported $53 billion joint takeover bid for PayPal Holdings Inc. (NASDAQ: PYPL), calling the $60.50 per-share offer "simply too low" and suggesting it is merely an opening gambit.

The Proposed Takeover

According to reports from Investing.com, payments firm Stripe has partnered with private equity giant Advent International to propose an acquisition of PayPal. The offer of $60.50 per share represents a 28% premium to PayPal's closing price of $47.37 on Tuesday.

The bid surfaces at a time when PayPal's stock has faced significant pressure, making it a potential target for acquirers who see long-term value in its vast user base and digital payments infrastructure.

Burry's Valuation Argument

Burry, the head of Scion Asset Management who is well-known for his prescient market calls, immediately rejected the adequacy of the offer. He stated that the bid validates his thesis that PayPal is a deeply undervalued company.

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"The bid is at 1.21x IV15 and simply too low," Burry was quoted as saying, referencing his internal intrinsic value metrics. He laid out his own valuation framework, which suggests a much higher price is warranted:

• Baseline Intrinsic Value: Burry's models place PayPal's value between $75 and $80 per share (IV10) or as high as $110 to $115 per share (IV8).
• Fair Takeout Price: After factoring in a standard control premium, Burry argued that a realistic winning bid would need to be approximately $100 per share.

What It Means for Investors

Burry's vocal opposition could galvanize other shareholders to hold out for a higher price, creating a significant hurdle for the potential buyers. He characterized the current offer as a starting point for negotiations, stating, "I am not selling, and I believe it is only an opening bid."

This public pushback puts pressure on Stripe and Advent to sweeten their offer to gain shareholder approval. For investors, Burry's analysis reinforces the bull case that PayPal's shares are trading at a steep discount to their fundamental worth, regardless of whether a deal materializes.