From Wall Street Favorite to Takeover Target
Five years ago, PayPal was a Wall Street favorite and the undisputed global leader in digital payments. Today, the company's stock has plunged, Apple Pay dominates payment services in the U.S., and PayPal is facing an aggressive takeover bid that it strongly dislikes.
This past week, the company synonymous with digital payments received a massive $53 billion offer to be taken private by upstart rival Stripe and the buyout firm Advent International. While PayPal’s board is actively discussing the bid, they reportedly believe the offered price of $60.50 a share is simply not enough.
A Staggering Comedown
This hostile situation marks a severe comedown for a company that effectively pioneered e-commerce and email-based payments. Founded in 1998, the San Jose firm launched the careers of tech titans Elon Musk and Peter Thiel, was acquired by eBay in 2002, and spun off as a highly successful independent company in 2015.
Driven by the e-commerce boom, continued growth pushed PayPal's market value as high as $360 billion in 2021. But since then, its growth has slowed drastically as competition intensified. Multiple attempts in recent years to jumpstart its core business have borne little fruit.
Dealmakers are now weighing the true value of PayPal’s sprawling payments ecosystem—from its 400 million-plus consumer accounts to its massive merchant checkout business. A key question remains whether the company is worth more as a single entity or as a collection of standalone assets, such as the Venmo peer-to-peer payment app, that could be sold off in pieces.
Missing Key Industry Opportunities
While bigger rivals such as Apple, Google, and Samsung—alongside upstarts like Stripe and Affirm—relentlessly rolled out new ways for consumers and businesses to transact, analysts note that PayPal was painfully slow to adapt.
The company failed to explore lucrative opportunities in digital banking and was sluggish in offering fresh options when consumers pivoted to paying with their smartphones. According to PYMNTS Intelligence, Apple Pay’s U.S. market share exceeded PayPal’s by a full 10 percentage points last year.
“Why bother becoming a digital bank if you can just be the world's biggest checkout button?” noted Dan Dolev, a senior analyst at Mizuho. “I think it was too easy to drink the honey straight from the checkout jar.”
Furthermore, PayPal has lagged behind many of its rivals in adopting AI and pushing into "agentic commerce"—a rapidly growing field where AI agents negotiate and complete purchases on a user's behalf.
What Happens Next?
The company has seen three CEOs in just four years. Current CEO Enrique Lores, who took over in March, is leading the company's second major turnaround effort since longtime chief Dan Schulman stepped aside in 2023.
While the board is highly unlikely to support a deal at $53 billion, Wall Street analysts believe Stripe and Advent can afford to pay more. The bidding group has reportedly assembled $17 billion in equity and $50 billion in bank financing, giving them the capacity to significantly raise their offer.
The bidders' next move will likely be informed by what PayPal reports during its quarterly earnings this month. A weak financial report will undoubtedly increase pressure on PayPal's leadership, while a strong one could encourage Stripe and Advent to submit a higher, undeniable offer.