Stripe, Advent consortium withdraws PayPal takeover bid; shares plunge

PayPal's stock price plummeted 14% after a consortium led by Stripe and financial investor Advent abandoned its pursuit of a takeover. The group had reportedly offered more than $50 billion for the payment processing giant, but PayPal deemed the offer too low, leading to the consortium's withdrawal.

This development marks a significant setback for PayPal shareholders, who had experienced a brief period of hope. The stock is now down 12% over the past year and 78% over five years. The company has been facing considerable challenges, including intense competition in the payment sector, slow technological advancements, and a noticeable slowdown in growth since the COVID-19 pandemic boom in digital payments.

Despite consistently increasing revenue since its 2015 IPO and achieving a record profit of $5.23 billion last year, PayPal's stock has long been perceived as a value trap. The company saw its CEO, Alex Chriss, depart earlier this year due to the board's dissatisfaction with the pace of change. The outlook for 2026 was also weak, with PayPal heavily impacted by competition from Apple Pay.

New CEO Enrique Lores is attempting to streamline the company's structure by dividing PayPal into three units: the core payment button business, consumer services, and large client and digital asset processing. Each unit has its own financial and revenue targets, sparking market speculation about a potential breakup. Lores is also prioritizing artificial intelligence initiatives. Meanwhile, Stripe, a popular payment provider for online shops, was valued at $159 billion in a private funding round in February.