PayPal Holdings Inc. has attracted preliminary takeover interest following a steep drop in its share price that erased nearly half of its market value over the past year, according to a Bloomberg report.
Shares of the San Jose-based digital payments firm surged as much as 9.7% on the news and were last up about 6.6% at $44.38, giving the company a market valuation of roughly $40.9 billion.
Bloomberg reported that PayPal has met with banks after receiving unsolicited interest from potential buyers. At least one major industry rival is said to be evaluating a bid for the entire company, while other parties are exploring specific assets. However, discussions remain at an early stage and may not lead to a transaction.
PayPal’s stock had fallen around 46% over the past 12 months amid slowing growth and intensifying competition from platforms such as Apple Pay and Google Pay.
The company is also undergoing leadership changes. Enrique Lores is set to assume the roles of president and CEO on March 1, replacing Alex Chriss, who was removed earlier this month after turnaround efforts failed to gain momentum.
Despite recent struggles, analysts note that PayPal retains strong network assets, including nearly $2 trillion in annual transaction volume and ownership of Venmo, a leading U.S. peer-to-peer payments platform.
The reported takeover interest comes amid broader pressure on payment and technology stocks, as investors weigh the potential disruptive impact of artificial intelligence on segments of the global economy.
Frequently Asked Questions
Why is PayPal attracting takeover interest?
PayPal Holdings Inc. has drawn preliminary takeover interest after its share price fell sharply over the past year, significantly reducing its market value and potentially making it more attractive to buyers.
How did the market react to the news?
PayPal shares jumped as much as 9.7% following reports of takeover interest, before trading around 6% higher in afternoon trading, reflecting renewed investor optimism.
Who could be interested in acquiring PayPal?
According to reports, at least one major industry rival is evaluating a full-company bid, while other parties are exploring specific assets. However, discussions remain early and may not result in a deal.
What challenges has PayPal been facing?
The company has struggled with slowing revenue growth, increased competition from Apple Pay and Google Pay, and leadership changes, including the recent departure of former CEO Alex Chriss.
Why do analysts see value in PayPal despite recent struggles?
Analysts highlight PayPal’s strong global payments network, nearly $2 trillion in annual transaction volume, and ownership of Venmo, which remains a leading U.S. peer-to-peer payments platform. These assets are considered strategically valuable.
