PayPal Could Pass to Stripe: Sale Talks Heat Up

PayPal, one of the oldest online payment services, may be about to change hands. As The Wall Street Journal reports, citing unnamed sources, talks to sell the company to the payment service Stripe and the private equity fund Advent have picked up again, and the deal could be finalized within the coming weeks.

The offer first surfaced in July: Stripe and Advent were prepared to buy out PayPal at $60.50 per share, valuing the company at $53 billion. At the time PayPal turned it down, but according to the publication the talks never really stopped. PayPal itself declined to comment, while a Stripe spokesperson said the company does not comment on “rumors and speculation.”

A rescue plan

The possible sale is being weighed against the backdrop of the new leadership's efforts to reverse the business's unfavorable trajectory. CEO Enrique Lores joined PayPal in March after many years at HP. As early as April he set about a restructuring: he reshuffled top management and split the business into three operating units — checkout solutions and PayPal proper; consumer financial services together with Venmo; and payment services and cryptocurrencies.

A month later, Lores promised investors that PayPal would return to “basics” and once again become a “technology company.” The recovery plan also includes a cost-cutting program: over the next two or three years, the workforce is expected to be trimmed by roughly 20%.

From legend to stagnation

PayPal was founded in 1998 by a group of entrepreneurs, many of whom later became prominent figures in Silicon Valley — among them Peter Thiel, Elon Musk, Max Levchin and Luke Nosek. In recent years the company has struggled: during the pandemic its volumes surged on the wave of the e-commerce boom, but growth then gave way to decline.

If the talks end in a deal, the arrangement itself will be symbolic: a service that once set the standard for online payments could pass to a younger, faster-growing rival. For now, though, both sides prefer to keep silent, and the final decision remains open.

Source: TechCrunch