Stripe and Advent Abandon Their PayPal Bid, Stock Falls 12.7%
Friday, August 289 Min Read
The $60.50-a-share offer made in July was withdrawn on August 28. The stock had closed above that price the day before; the market was pricing a raise.
$47.27
July 14 Close, Before the Bid Surfaced
$60.50
The Advent–Stripe Offer, a 28% Premium
$61.47
August 27 Close, 1.6% Above the Offer
$53.66
August 28 Close, Down 12.71% on the Day
In This Piece6 Sections
On August 27 PayPal closed at $61.47. The only offer on the table was $60.50 a share.
The next morning Bloomberg reported that the Advent International–Stripe consortium 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. 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 the all-cash offer: more than $53 billion, among the largest debt-financed takeovers on record, backed by roughly $50 billion of committed bank financing.
Stripe is a private payments company last valued near $159 billion; Advent had just closed a $26 billion buyout fund, has put over $7.8 billion into 18 payments and fintech companies since 2008, and took Nuvei private for $6.3 billion in 2024.
Block was in the original consortium and left before the final offer. The bid carried a 28% premium to PayPal's July 14 close of $47.27, and the stock jumped 16% premarket.
The Chain of a Takeover Premium
- 01Bid becomes publicStock jumps toward the offer price
- 02Board calls the price inadequateMarket expects a raise; price tops the offer
- 03Buyer walksPremium is erased in one session
- 04The company's own story remainsPrice can settle above the pre-bid level
Why PayPal Did Not Accept
PayPal's board found the price inadequate; accounts diverge on whether it formally rejected the offer on July 20 or never replied at all. Both agree the sides could not settle on price.
The board's hand strengthened over the next six weeks. July 28 results showed adjusted earnings of $1.38 a share against $1.28 expected, revenue of $8.68 billion, currency-neutral payment volume of $486.4 billion (up 9%), and guidance raised to $5.38.
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 the board needed one thing: a quarter showing it could deliver more alone.
Enrique Lores split the company into three units and cut headcount by 20%, targeting $400 million of savings in 2026 and at least $1.5 billion over two to three years.
Price was not the only obstacle. George Paul of White & Case said a payments combination of this scale is what regulators examine closely, citing processing overlap and data pooling.
The Mechanism: What an Offer Price Tells You
Once a company receives a takeover bid, its shares become a probability-weighted blend of two futures: the price if the deal closes and the price left if it breaks. Only the probability is unknown, and the market publishes its estimate every day.
What you buy after a bid announcement is not the business but the outcome of a negotiation: the thing you value and the thing you pay for come apart.
Troy Hooper of Mergermarket said the sides never agreed on value, with regulatory challenges on top:
"it appears Stripe may have decided the juice wasn't worth the squeeze."
Bernstein pointed to two problems: 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 note added that it was not clear Stripe and Advent could afford a price meaningfully above $60.50.
After the drop, PayPal's market value stood at roughly $52.6 billion — close to the withdrawn offer's total price.
The Three Layers of the Price
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. Second, the bid itself: a buyer arriving with $50 billion of committed bank financing has stated a view, and that view does not disappear when the buyer does.
Timeline
- February 3PayPal names Enrique Lores, ex-HP chief, to replace Alex Chriss.
- July 14The stock closes at $47.27.
- July 15Reuters reports the Advent–Stripe offer of $60.50 a share, valuing PayPal above $53 billion.
- July 28Second-quarter results beat; full-year guidance rises to $5.38 a share.
- August 6A filing shows Greenlight Capital's second-quarter PayPal position.
- August 27The stock closes at $61.47 — above the offer.
- August 28Bloomberg reports the consortium has walked; the stock falls to $53.66.
The Other Side
| Consortium's Side | The Board's Side |
|---|---|
| $60.50 was 28% above the pre-bid price, in cash | The offer excluded the turnaround plan's value |
| A deal this size meant a long competition review | Review risk is the buyer's problem, not a seller's discount |
| Management wanted more than the buyer could pay | Q2 showed the company can move forward alone |
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%; PayPal's 12.71% decline was one headline, not market direction.
What Is Left
PayPal is now a company without a bid: 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; Reuters says a future approach is not out of the question.
Market capitalization reflects not what a company produces but what the market is looking at; between July 15 and August 28 it was looking at the negotiation.
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.
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Since The Event