Story
PayPal Shares Plunge After Advent-Led Consortium Abandons Takeover Bid
PayPal (PYPL) shares plunged in late trading Thursday after a potential acquisition by a private equity consortium was reportedly abandoned. The stock fell 12.2% to $53.97 in after-hours trading, erasing gains that had been fueled by months of takeover speculation.
Deal Collapse Details
According to a report from Bloomberg News, a consortium that included private equity firm Advent International and payments competitor Stripe has walked away from its pursuit of PayPal. The group had submitted a bid of $60.50 per share, which would have valued the payments giant at more than $53 billion.
The deal was reportedly scuttled after PayPal’s board determined the offer was insufficient. The board also raised concerns about potential regulatory and financing obstacles, prompting the consortium to withdraw its bid entirely, the report said.
AdMarket Impact and Outlook
The sharp sell-off reflects the evaporation of the acquisition premium that had been supporting PayPal's stock price. Shares had rallied significantly from a 52-week low of $38.46 after news of the potential deal first surfaced in mid-July.
With the prospect of a buyout now off the table, investors are forced to reassess PayPal's value as a standalone entity. The company faces significant headwinds, including a declining transaction take rate and intense competition from rivals like Visa and Stripe. The wide gap between the rejected $60.50 offer price and the current after-hours trading level highlights the market's diminished expectations for the company's near-term prospects.
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