PayPal Tumbles on Report of Abandoned Buyout; Gap Surges on Turnaround Hopes

Shares of PayPal tumbled in premarket trading Friday after a media report indicated a potential multibillion-dollar acquisition of the payments company had been abandoned, while retailer Gap saw its stock surge on positive corporate news.

Payments and Retail Stocks See Major Moves

PayPal (PYPL) shares plunged approximately 14% following a Bloomberg report that fintech firm Stripe and private equity company Advent International had walked away from a bid to acquire the company. The reported offer was valued at $60.50 per share, which would have valued PayPal at more than $53 billion.

In contrast, Gap (GPS) shares jumped more than 13%. The apparel retailer announced it had appointed industry veteran Michael Francis as the new chief executive of its largest brand, Old Navy, as part of a turnaround effort. The move accompanied a quarterly profit that beat analyst expectations and a raised annual profit outlook, supported by strong performance at its namesake Gap brand.

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Tech Sector Diverges on Outlooks

The technology sector saw mixed reactions to corporate earnings and forecasts. Investors showed high sensitivity to future guidance, particularly for stocks that have seen significant gains.

• Marvell Technology (MRVL): Shares fell over 7% despite the chipmaker beating second-quarter estimates and raising its long-term revenue forecasts for fiscal 2027 and 2028. The updated guidance, which now projects fiscal 2027 revenue of roughly $12 billion, appeared to underwhelm investors who may have expected a more immediate boost from the company's AI chip partnership with Google, especially after the stock's near-tripling year-to-date.
• Elastic (ESTC): The software company's stock surged nearly 22%. Elastic reported first-quarter results that topped Wall Street expectations and issued a full-year forecast for both earnings and revenue that was stronger than anticipated. The company pointed to strong momentum across its AI, security, and observability platforms.
• SentinelOne (S): The cybersecurity firm's shares dropped more than 4%. A disappointing profit outlook for the third quarter and full fiscal year overshadowed a revenue beat. The company's guidance for third-quarter adjusted earnings of 8 to 9 cents per share fell below the consensus estimate of 11 cents, signaling to investors a weaker earnings trajectory.