The $53-billion “Digital Payment Century Acquisition” has come to an end! PayPal (PYPL.US) plummeted by more than 15% before the market, and the annexation premium evaporated instantaneously

The Zhitong Finance App learned that some media quoted information revealed by people familiar with the matter as reporting that a consortium formed by private equity firm Advent International and digital payment supergiant Stripe has officially abandoned the acquisition of PayPal (PYPL.US), causing the latter's pre-market stock price to plummet by more than 15% to around 51.70 US dollars. The consortium previously proposed an offer of $60.50 per share, totaling about $53 billion, but was rejected by the PayPal board of directors on the grounds that the valuation was insufficient; compared with PayPal's historical peak valuation of about 360 billion US dollars during the 2021 global COVID-19 online payments boom, this offer was only a fraction of that time.

If the takeover forces eventually exit, it means that PayPal's stock price will return to fundamental pricing from “mergers and acquisitions premium transactions” — that is, online payment technology and digital ecosystem leaders such as Apple and Google continue to erode their core payments market share, and the new CEO Enrique Lores must prove its transformative value with cost cuts, high-margin products, and profit growth.

The $53 billion bid proposed by a consortium formed by Stripe and private equity firm Advent is huge, and the potential target of the acquisition was PayPal, the “crown jewel” of US fintech. This “century takeover” in the global digital payments sector has basically come to an end, which largely means that PayPal's firm selection of the $53 billion takeover offer fails to fully reflect the value of the platform, brand, and user assets, but if the performance growth trajectory does not accelerate again, the higher valuation implied by the board of directors will be difficult to obtain recognition in the capital market.

When the Stripe-Advent consortium proposed the acquisition offer, PayPal, an American digital payment and digital wallet operator founded in the late 1990s, has been struggling in recent years to compete with strong digital payment competitors such as Apple Pay by Apple and Google Pay founded by Google. Against the backdrop of continued slowing performance growth, management is striving to take transformational measures to boost the continuing slump in stock prices.

From the “crown jewel” of 360 billion dollars to the 53 billion dollar offer: PayPal refuses to sell at a low price, and the transformation succeeds or fails to take over the valuation trajectory

During the pre-market trading session for US stocks on Friday, PayPal (PYPL.US) shares plummeted by more than 15% during pre-market trading. Earlier, the media quoted people familiar with the matter as reporting that a consortium formed by private equity leader Advent International and digital payment technology processor Stripe had abandoned the acquisition of this pioneering American fintech company.

In July, several media reports said that the consortium had proposed a purchase offer of 60.50 US dollars per share, or a total purchase price of about 53 billion US dollars, for this payment company, which was once regarded as the “crown pearl” of American fintech.

This offer from Advent International and Stripe as a consortium is only a fraction of the approximately US$360 billion valuation that PayPal received at the peak of its boom during the 2021 pandemic. The source said earlier that PayPal's board of directors felt that the initial offer was insufficient to reflect the company's value.

As the pandemic-driven boom in online shopping and digital payments subsided, and consumers returned to physical stores one after another, it has been difficult for PayPal to regain its foothold.

Competition from US tech giants Apple and Google continues to intensify. The two companies continue to accelerate expansion by integrating digital payment services and ecosystems into the smartphone ecosystem, thus eroding PayPal's core market share.

Over the years, PayPal has addressed these pressures through a series of comprehensive reforms, including management restructuring, massive layoffs, and a refocus on higher-margin products.

Last month, PayPal further stepped up its transformation plans, raised its full-year profit forecast for 2026 under new CEO Enrique Lores, and announced cost savings measures.

Troy Hooper, co-head of US equity capital markets from ECM US, said: “In this context, PayPal has every reason to argue that $53 billion does not fully reflect the value of its platform, brand, and user base.”

“A company doesn't necessarily need to first prove that the transformation has been successful before asking for a higher offer. Nevertheless, to maintain this position, management must ultimately prove that the company's transformation strategy translates into stronger growth and profits.”

As of the close of the previous trading day, PayPal's market capitalization was around $53 billion, roughly equivalent to the reported takeover offer. Since the media reported the offer in July, the stock has accumulated a cumulative increase of nearly 30%.

In PayPal's recent performance conference call, Lores did not comment on the buyout rumors, but said the company would carefully evaluate any opportunities or strategic options it believes can create greater value for shareholders.

Stripe's previous $53 billion hunt to create a “super full-stack operating system” for global digital payments

If the essence of the moat of Apple Pay and Google Pay comes mainly from the terminal ecosystem and traffic entry; more of Stripe's real value comes from the programmable infrastructure, data, and scale effects of digital payment systems; PayPal's scarcity lies in having both a consumer network and a payment back office — this is the core reason why it may become Stripe's strategic acquisition target.

By combining the two, a unified business-consumer data map can be used to improve payment authorization rates, fraud identification, and intelligent routing efficiency, and leave more “in-system transactions” within the network to reduce some external processing costs and improve individual transaction efficiency.

Furthermore, the more forward-looking value lies in AI smart commerce: shopping intelligence not only needs to discover products, but also complete identity authentication, payment authorization, anti-fraud, dispute handling, and after-sales fulfillment; Stripe's programmable infrastructure superimposes PayPal's account credentials, consumer trust, and Agent Ready/Store Sync capabilities, and has the opportunity to become the default settlement layer for AI agents such as OpenClaw to move from “search” to “transaction.”

If Stripe merges PayPal, global payments will be relatively separated from each link in the value chain and upgraded to a cross-level competition between full-stack payment platforms and ecosystem controllers at different levels. If the transaction finally comes to fruition, the global payment competition will be upgraded from digital wallets, merchant billing, and payment processing to a multi-layer war between full-stack payment platforms, terminal wallet entrances, merchant business ecology, and professional financial infrastructure. Stripe-PayPal will use merchant APIs, consumer accounts, P2P networks, and checkout capabilities to compete asymmetrically with Apple Pay and Google Pay terminal entrances, Shopify's merchant ecosystem, and processing networks such as Adyen and Fiserv/Worldpay.