Shares of PayPal (NASDAQ: PYPL) jumped in late-day trading after a report that Stripe, a private firm, was considering buying all or part of the payments firm.
According to a Bloomberg report, individuals familiar with the discussions said the negotiations are in a late stage, but no firm deal has been reached.
This morning, Stripe announced that it was pursuing a tender offer for its shares at a valuation of $159 billion.
PayPal is currently trading at a market cap of around $44.275 billion.
If a deal were reached, the combined operation would pose a dominant force in global payments and e-commerce.
PayPal was a trailblazer in the payments sector, yet in recent years, competitors have challenged its position as banks and other Fintechs have garnered more market share.
Year to date, PayPal shares are down by a whopping 19%. The one-year decline is even more severe, with shares down by over 37%. Large shareholders and insiders may be seeking a way to generate more value through an M&A transaction. A report by Barons indicated that one analyst sees a lot of value in PayPal, and hence the potential offer.
As payments migrate to stablecoins, a bigger firm may be better positioned. PayPal issues its own PYUSD, powered by Paxos. Stripe currently accepts USDC.
Stripe is stronger in the B2B segment with more features, while PayPal is more consumer-facing. A deal may make sense.
As of yet, neither firm has acknowledged any discussions, so for the moment, it is all chatter.
