Stripe and Advent Abandon Their PayPal Bid, Stock Falls 12.7%

On the evening of August 27, PayPal closed at $61.47. The only offer on the table to buy the company was $60.50 a share. The market, in other words, was paying more for PayPal than the people trying to buy it had agreed to pay.

The next morning Bloomberg reported that the consortium of Advent International and the payments company Stripe had dropped the bid. Reuters confirmed it. The stock closed at $53.66: a fall of $7.81, or 12.71%, in a single session. Volume reached 36.2 million shares, roughly 124% above the three-month average.

That $7.81 was not a business line PayPal lost that day, or a customer relationship that broke. It was the price of a probability, and the probability went to zero.

What Was Put on the Table in July

On July 15, Reuters reported that Advent International and Stripe had prepared an all-cash offer of $60.50 a share for PayPal. The total came to more than $53 billion, which would have placed the transaction among the largest debt-financed corporate takeovers on record. Behind it sat roughly $50 billion in committed bank financing — not an exploratory approach but a fully underwritten one.

The buyers were an unusual pair. Stripe is a privately held payments company last valued near $159 billion in a February employee tender offer. Advent is a private equity firm that had just closed a $26 billion buyout fund and has put more than $7.8 billion into 18 payments and fintech companies since 2008, including taking Canada's Nuvei private for $6.3 billion in 2024. According to Reuters, Block was part of the original consortium and left the group before the final offer was made.

The bid carried a 28% premium to PayPal's July 14 close of $47.27. The stock jumped 16% in premarket trading the next day.

The last link in that chain is the one usually skipped: when a bid fails, the stock does not automatically return to where it started. Why that is comes further down.

Why PayPal Did Not Accept

PayPal's board found the price inadequate. The accounts diverge here and there is no reason to hide it: some outlets reported a formal board rejection on July 20, while Reuters's version is that the company never sent the consortium a formal reply at all. What both agree on is that the two sides could not settle on a price and the talks stalled.

What strengthened the board's hand happened over the following six weeks. Second-quarter results released on July 28 showed adjusted earnings of $1.38 a share against expectations of $1.28. Revenue came in at $8.68 billion. Total payment volume reached $486.4 billion on a currency-neutral basis, up 9% year over year. The company raised full-year adjusted earnings guidance to $5.38 a share.

The quarter was not flawless. Non-GAAP operating margin fell 248 basis points to 17.4%, and transaction margin dollars rose only 1%, to $3.9 billion. But in a takeover negotiation the board needed one thing, and it got it: a quarter suggesting the company could deliver more on its own.

Enrique Lores, who took over in early February after running HP, split the company into three units and cut headcount by 20%. He has targeted $400 million of gross run-rate savings in 2026 and at least $1.5 billion over the next two to three years.

Price was not the only obstacle. George Paul, a White & Case partner quoted by Mergermarket, said a payments combination of this scale is precisely the kind of transaction competition regulators examine closely, citing both the overlap in payment processing and the pooling of data. PayPal alone handled $486.4 billion in the quarter — close to $2 trillion annualized. Adding Stripe's volume on top of that pointed to a long review from the start.

The chart above is live and shows the trailing three months, so both the July jump and the August drop fall inside the window. Read it as the ground the events sat on rather than as proof of any claim.

The Mechanism: What an Offer Price Actually Tells You

Once a company receives a takeover bid, its shares stop being the price of one thing. They become a probability-weighted blend of two futures: the price you collect if the deal closes, and the price left over if it breaks.

It can be written as an equation. Share price equals the probability of a deal times the deal price, plus the probability of no deal times the standalone price. Only one term is unknown — the probability. And the market publishes its estimate of it every day. That estimate is the share price.

What this arithmetic teaches is what an investor buying after a bid announcement is actually purchasing. Not the business, but the outcome of a negotiation — one you are not party to, whose timetable you do not know, and whose end you learn about after the fact. The thing you value and the thing you pay for come apart.

The Reasoning Behind Walking Away

Troy Hooper of Mergermarket said the two sides never agreed on the value of the business, and that the regulatory challenges of a transaction this size were layered on top:

"it appears Stripe may have decided the juice wasn't worth the squeeze."

Bernstein's analysts pointed to two problems at once: the level PayPal's management would accept, and whether the buyers could reach it.

"PayPal's management is unlikely to accept a price that is not meaningfully above $70"

The same note added that it was not clear to them whether Stripe and Advent could even afford a price meaningfully above their $60.50 bid. The deal was therefore stretched from both ends: the seller wanted more, and the buyer's capacity to pay more was uncertain.

After the drop, PayPal's market value stood at roughly $52.6 billion — close to the total price of the offer that had just been withdrawn.

The Three Layers of the Price

The most instructive part of this episode is not where the stock landed but where it did not.

The offer vanished, but the price did not return to $47.27. It settled at $53.66, 13.5% above the pre-bid level. That $6.39 comes from two places. First, the July 28 results: the company's profitability and outlook are better than they looked in mid-July. Second, and less often discussed, the information carried by the bid itself. A buyer who arrives with $50 billion of committed bank financing has stated a view about the company, and that view does not disappear when the buyer does.

Michael Burry said in July that the $60.50 offer was too low. David Einhorn's Greenlight Capital opened a new PayPal position in the second quarter and disclosed it in an early-August filing. That position met its first real test on August 28.

The Other Side

Both readings hold together. What decided the matter was a third thing: with the stock trading above the offer, every close sent the buyer the same message — you cannot buy it from here.

In the same session the S&P 500 fell 0.27% and the Nasdaq Composite 0.52%. The 12.71% decline in PayPal was the result of one headline, not of market direction, and the broader path in the chart makes that separation visible.

What Is Left

PayPal is now a company without a bid. It has 439 million active accounts, Venmo, Braintree and a restructuring plan split across three units. After the drop it trades at roughly 7.5 times free cash flow. According to Reuters, a future approach by Advent and Stripe is not out of the question if conditions change.

But that possibility is no longer in today's price. On August 28 the market stopped pricing PayPal as the subject of a negotiation and went back to pricing it as a company.

The collapse of the deal changed nothing about PayPal's business. What it changed was what the share price was measuring. Market capitalization reflects not what a company produces but what the market is looking at; between July 15 and August 28, the market was looking at the negotiation rather than the company.

This article draws on the withdrawal first reported by Bloomberg and confirmed by Reuters, Reuters's July 15 report of the offer, PayPal's second-quarter results release, Mergermarket's regulatory assessment and reported excerpts from a Bernstein investor note. The reasons for the withdrawal rest on unnamed sources and none of the parties has commented; whether the board formally rejected the offer on July 20 is disputed across accounts. The probability calculation in the worked example is an inference that assumes Bernstein's $70 threshold and treats the August 28 close as the standalone value; it is not a figure supplied by any party.