PayPal Stock Drops 12% as Stripe and Advent Withdraw $53B Acquisition Bid

A buyout consortium comprising payment provider Stripe and private equity firm Advent International has withdrawn its takeover bid for PayPal Holdings Inc., abandoning an offer of $60.50 per share that valued the digital payments firm at approximately $53 billion. The decision to step away came after PayPal's board of directors rejected the proposal as inadequate. News of the abandoned deal sent PayPal stock plummeting 12.71% on Aug. 28 to close at $53.66 per share, stripping away the takeover premium that had accumulated in recent weeks, as reported by Yahoo Finance.

Trading volume surged during the sell-off, with about 36 million shares changing hands—more than double the equity's recent daily average volume. Prior to the consortium's exit, speculation surrounding the prospective acquisition had driven PayPal's share price up nearly 30%, with the stock briefly closing at $61.47 just as the bidding group elected to walk away, according to reporting by Axios. Following an intraday low of $52.62 during Friday's session, PayPal shares settled nearly 11% below the rejected $60.50 buyout price.

Disagreements over valuation ultimately stalled negotiations between the suitors and PayPal leadership. Analysts at Bernstein told Reuters that PayPal's board was unlikely to entertain an acquisition offer that failed to significantly surpass $70 per share, a level that would require a roughly 30% gain from Friday's closing price. Refinitiv data reported by Reuters shows PayPal trading at roughly 10.9 times forward earnings—a discount of about 27% relative to the payments industry median of nearly 15 times—despite the company recently raising its 2026 earnings guidance and outlining further cost-cutting measures.

The collapsed $53 billion valuation highlights the sharp decline PayPal has experienced since the height of the pandemic e-commerce boom, when its market capitalization reached approximately $360 billion in 2021. The withdrawn offer represented an 85% drop from that peak valuation. Over recent years, PayPal's core, higher-margin branded checkout business has faced growing competitive pressure from mobile ecosystem payment options like Apple Pay and Google Pay, as well as e-commerce platforms such as Shopify's Shop Pay.

The deal's termination places renewed emphasis on the corporate turnaround strategy led by Chief Executive Officer Enrique Lores. During PayPal's July earnings call, Lores declined to comment specifically on the Stripe and Advent proposal, but noted that management continually evaluates strategic alternatives capable of delivering superior shareholder value. To match the $60.50 per share offer that management rejected, PayPal's stock will need to rebound by approximately 13%.

As part of its long-term growth plan, PayPal is attempting to position itself for the expansion of agentic commerce, an emerging model where artificial intelligence software autonomously manages product searches, comparisons, and payment transactions for consumers. Industry estimates project the agentic commerce market could expand to $1.7 trillion by 2030. In August, PayPal introduced a "Know Your Agent" protocol at the Ai4 conference to adapt its established identity verification and fraud prevention infrastructure for AI transactions, while surveying 498 U.S. merchants to evaluate business readiness for the transition.

Raymond James analysts told Reuters that PayPal's extensive merchant and consumer relationships could offer a meaningful advantage in agentic commerce, though adoption remains in its early stages. For now, however, investors must evaluate PayPal on its standalone operational performance. With no external buyer offering a floor for the stock, the company's valuation will depend on its ability to defend checkout market share, expand operating margins, and deliver on its revised profit targets.