Michael Burry Says $53B Offer For PayPal Is 'Simply Too Low' – ‘The Big Short’ Investor Expects Higher Bid

• Burry said Stripe and Advent International's $53 billion offer for PayPal values the company at only a 21% premium per his IV15 valuation methodology.
• Burry believes the proposal is only an opening bid and expects the buyers to raise their offer.
• He added he’s not selling his PayPal shares at the current offer price.

‘The Big Short’ investor Michael Burry said on Wednesday that the $53 billion buyout offer for PayPal (PYPL) from payments company Stripe and private equity firm Advent International is “just too low.”

In his latest Substack post, Burry stated that he believes the offer is only an “opening bid” and that it is poised to rise. “The company is well below intrinsic value, and any successful bid should be well above the intrinsic value to account for the control premium,” Burry wrote.

“$60.50 is just too low. I am not selling, and I believe it is only an opening bid.”
– Michael Burry, Former Founder of Scion Asset Management

PYPL’s stock jumped over 18% in pre-market trade and is on track to hit near 6-month highs. It was among the top trending tickers on Stocktwits, with retail sentiment jumping to ‘extremely bullish’ from ‘bullish’ territory over the past day. Chatter around PayPal’s shares remained at ‘high’ levels.

Burry Says PayPal Bid Undervalues The Business

PayPal closed at $47.37 on Tuesday, which puts the proposed $60.50 offer at roughly a 28% premium to the market price.

Using his own valuation methodology, however, Burry stated the bid is only about 21% above PayPal's "IV15," which he believes is insufficient for a transaction that transfers control of the company. "A control premium should take any buyout well above IV15, and 21% more is not nearly enough," he wrote.

Burry said the buyout proposal itself reinforces his long-held view that PayPal is trading below its intrinsic value. "PayPal is one of the cheapest quality businesses in the portfolio," he wrote, adding that he has no intention of tendering his shares at the current offer price.

Retail traders on Stocktwits echoed Burry’s sentiment that Advent and Stripe's offer to buy out PayPal was too low.

How Burry's IV Framework Values PayPal

Burry values companies using a system he calls "IV" (intrinsic value) paired with a number representing a target earnings multiple. In this context, IV15 means the price a minority shareholder should be willing to pay based on 15 times his estimate of the company's true owner earnings, with no premium for control baked in. 

IV8 and IV10 work the same way, just using 8x and 10x multiples instead, numbers Burry treats as closer to what the business is actually worth once you account for its full earning power, not just where the market happens to be pricing it today.

By his estimate, PayPal's IV10 sits at $75 to $80 per share, and its IV8 at $110 to $115. Since a full buyout should typically go well beyond a company's per-share intrinsic value, to compensate the seller for handing over control of its cash flows and operations, Burry stated that a fair offer should land somewhere between $75 and $115, with his best estimate landing around $100.

"With control over the cash flows, those businesses and the personnel, the new owner will have many levers to increase value and make for a better overall business," he wrote, explaining why the buyers like Stripe and Advent should be paying more.

Burry calls IBM Selloff An Overreaction

On IBM, which suffered its worst single-day stock drop since at least 1968 on Tuesday, Burry stated the selloff was an overreaction to a volatile but historically normal swing in the company's mainframe business.

IBM’s stock was among the top trending tickers on Stocktwits at the time of writing. The shares fell over 25% on Tuesday after the company reduced its guidance for the second quarter (Q2) and slashed revenue estimates to below Wall Street expectations. 

On Wednesday morning, IBM stock edged 0.89% higher in pre-market trade, with retail sentiment flipped to ‘extremely bullish’ from ‘bearish’ over the past day.

Burry said he is not selling his PayPal shares, despite the offer, and he isn't buying more IBM stock at current prices even with the drop. PYPL’s stock has fallen over 20% this year, while IBM’s stock is down nearly 30%.

Read also: HCA Stock Plummets After Slashing 2026 Guidance – Marks Fifth Straight Day Of Losses

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