Five years ago, PayPal was a Wall Street favorite and a dominant force in digital payments. Since then, its stock has plummeted, Apple Pay has taken the top spot in the U.S. market, and PayPal is now resisting an unwanted takeover bid.
The pioneer of digital payments recently received a $53 billion offer to go private from upstart competitor Stripe and private equity firm Advent International. According to sources familiar with the company, PayPal’s board believes the $60.50 per share offer is insufficient, though they are expected to meet on Monday to discuss it. It is a dramatic shift for the company founded in 1998 that helped launch tech leaders like Elon Musk and Peter Thiel. After being acquired by eBay in 2002 and spun off in 2015, PayPal saw its market valuation peak at $360 billion in 2021. Since that high, growth has stalled, competition has intensified, and multiple turnaround efforts have struggled to deliver results.
Dealmakers are currently assessing the value of PayPal’s expansive network, which spans over 400 million consumer accounts and a major merchant processing business. This has raised questions about whether the company is worth more as a whole or broken into pieces, such as selling off its peer-to-peer payment app, Venmo. PayPal declined to comment on the matter.
In February, upon appointing a new CEO, the company publicly admitted it needed to address its position in the market, stating that while some progress had been made, the pace of execution fell short of board expectations. Enrique Lores, who assumed the CEO role in March, has not publicly commented on a potential sale.
Analysts note that as competitors like Apple, Google, Samsung, Stripe, and Affirm introduced new payment features, PayPal was slow to expand into digital banking or modernize its mobile experience. Mizuho senior analyst Dan Dolev suggested PayPal became overly reliant on its position as the primary online checkout button rather than innovating. Last year, Apple Pay surpassed PayPal’s U.S. market share by 10 percentage points, according to PYMNTS Intelligence. Furthermore, PayPal has lagged in adopting artificial intelligence and agentic commerce, where AI automates consumer transactions.
Clear Street analyst Owen Lau noted that PayPal focused on winning market share through aggressive pricing, which eroded profit margins. Key areas like Venmo have seen growth decelerate, while newer offerings like buy now, pay later have underperformed. With its user base leveling off, the company has had three CEOs in four years and is currently on its second major turnaround attempt since long-time chief Dan Schulman left in 2023.
Internal friction also preceded the latest leadership change. Last year, a proposed deal to integrate PayPal into OpenAI’s ChatGPT caused conflict between the board and then-CEO Alex Chriss, leading to Chriss’s departure before Lores took over.
Despite the ongoing challenges, sources indicate the board is unlikely to accept the current $53 billion offer, questioning whether it is high enough to even begin formal negotiations. Some board members believe PayPal could achieve a higher valuation by executing its current turnaround plan. However, analysts believe Stripe and Advent have the financial backing—including $17 billion in equity and $50 billion in bank debt—to raise their offer. The outcome may depend on PayPal’s upcoming quarterly earnings report. Competing offers from other suitors remain unlikely, with Morgan Stanley analysts noting that the Stripe-Advent proposal likely represents the most viable path forward for the company.
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