PayPal shares fell after a report that the company does not intend to sell the business
Paypal prepares to defend itself against an unwanted takeover/Photo: shutterstock.com/Sundry Photography
Shares of Paypal jumped by almost 6% after the publication of Semafor, in which it reported that the fintech company is not negotiating its sale with industry giant Stripe or anyone else. By the close of trading, the quotes lost part of the growth and ended the day down 3.8%.
This week, Bloomberg sources said that PayPal attracted the interest of potential buyers after its capitalization almost halved. Then the agency found out that non-public platform Stripe is considering the possibility of acquiring the company or part of its assets. Both publications provoked a sharp growth of PayPal quotations. During three sessions, the company's securities rose by about 13%.
According to Semafor's sources, PayPal has been working with bankers in recent months to prepare for a possible attack from activist investors or an unwanted takeover bid. The company went to these measures because executives feared that falling shares could leave it vulnerable.
PayPal declined to respond to the publication's request, Stripe was unable to provide comment promptly.
Semafor notes that it is difficult for private companies, even large ones, to acquire a large public player. Stripe cannot pay with its own shares and would have to raise significant debt financing.
According to the publication's sources, Stripe's interest may be linked to PayPal's broad customer base and its payment infrastructure. However, any talks on a possible deal will be postponed until the end of the transition period at PayPal: the company's head Alex Kriss resigned at the beginning of the year, and the new one - Enrique Lores - will officially take office next week.
Wall Street has become more cautious about the future of PayPal stock over the past month: the company now has 31 neutral ratings out of 47, according to Marketwatch. So many analysts are advising neither to build up a position in PayPal nor to reduce it. A month ago, there were 26 such ratings. At the same time there are less recommendations to buy - 11 vs. 15, and recommendations to sell - five vs. six.
The average target price implies the potential growth of quotations by about 6%.
This article was AI-translated and verified by a human editor
