PayPal Stock Surges as CEO Won't Rule Out Stripe Deal
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- PayPal (PYPL) stock climbed more than 4% on Tuesday after CEO Enrique Lores said the company "remain[s] open and objective in evaluating opportunities" without abandoning its own turnaround plan.
- Stripe and Advent offered to acquire PayPal earlier this year for roughly $60 per share, according to Reuters — a bid that William Blair's Andrew Jeffrey called "lowball" and Michael Burry said was "simply too low."
- PayPal's Q2 results beat forecasts, posting diluted EPS of $1.38 and payment volume of $486.4 billion (up 10% year-over-year), prompting the company to raise its full-year adjusted earnings outlook.
- PayPal shares closed at roughly $58.79, still down about 1% year-to-date and 80% below the all-time high set in 2021 during the pandemic e-commerce surge.
- Lores officially became CEO in March after Alex Chriss stepped down in January and in April reorganized PayPal into three units: checkout solutions/PayPal, consumer financial services/Venmo, and payment services/crypto.
- Total operating expenses ran about 3% above expectations per Piper Sandler, while management committed to at least $1.5 billion in planned cost savings to fund new consumer-business investments through 2027.
- PayPal has lost ground in online commerce to Apple, Google, and Stripe, and is now betting that its largest future transaction-margin growth will come from financial services beyond core Venmo checkout.
Why it matters: A 5% pop on "we're listening" language is striking given the $60/share Stripe-Advent bid is already on the table — even William Blair and Michael Burry called that offer too low, meaning the market is pricing in the possibility of a higher bid rather than confidence in the standalone turnaround. PayPal's Q2 beat (10% volume growth, EPS of $1.38) buys Lores time, but Piper Sandler's note that operating expenses ran 3% above expectations shows the cost of executing that plan is already rising.
