PYPL Stock Slips After-Hours — Why PayPal Board Isn’t Sold On The $53B Stripe-Advent Bid

• Financing certainty, regulatory risks, and the time needed to complete a deal remain key considerations for the board.
• Stripe and Advent have secured about $50 billion in financing and remain committed to the deal.
• Investors will now be watching PayPal's July 28 earnings report for evidence that its core checkout business is stabilizing.

PayPal (PYPL) shares slipped in after-hours trading on Thursday after a report said the company’s board views the reported $53-billion takeover offer from Stripe and Advent International as inadequate. The board reportedly believes the $60.50-per-share proposal undervalues PayPal and is also weighing financing certainty, regulatory risks and the time required to complete a deal.

PYPL shares ended Thursday’s regular session up 2.18%. At the time of writing, the PYPL stock was down 0.4% in after-hours trading.

Why PYPL Board Isn’t Sold On The Bid

PayPal’s board is evaluating the offer alongside management’s turnaround strategy and the possibility that competing bids could emerge, according to an exclusive report by Reuters. While the proposed $60.50 per share represents a premium to the company’s recent trading price, the board’s preliminary view is that it does not fully reflect the value PayPal could create if management successfully executes its strategy.

The board is also considering factors beyond valuation, including financing certainty, potential regulatory hurdles, and what could be a lengthy timeline to complete any transaction. The board is scheduled to hold additional meetings and has not yet formally responded to the proposal, stated the Reuters report.

The consortium’s offer comes as PayPal continues to face competition from rivals such as Apple Inc.’s (AAPL) payment service Apple Pay and Alphabet Inc.’s (GOOGL) Google Pay while working to revive growth.

Stripe, Advent Push Ahead With Financing

JPMorgan and Morgan Stanley have arranged around $50 billion in financing for the consortium and are also advising the bidders, according to Reuters. Stripe and Advent are contributing $17 billion in equity toward the proposal. Under the offer submitted earlier this month, Stripe and Advent would jointly own PayPal with equal stakes rather than break up the company.

Despite PayPal's reservations, sources told Reuters that Stripe and Advent remain the most serious bidders for the company and are still interested in reaching an agreement. Block, which initially joined Stripe and Advent in approaching PayPal in April, exited the consortium before the latest offer was submitted.

PayPal’s July 28 earnings report will be closely watched by investors for signs of improving momentum in its core checkout business after the company issued a weaker-than-expected outlook earlier this year. 

PYPL Stock: What Stocktwits Retail Sentiment Says

On Stocktwits, retail sentiment for PYPL was ‘extremely bullish,’ with message volume being ‘extremely high’ at the time of writing. Over the past seven days, message volume around the stock has surged 585%, while the ticker’s watcher base has risen 0.4% in the same period.

PYPL is also drawing support from Stocktwits retail investors, many of whom say the reported $60.50-per-share takeover offer undervalues the payments company.

PYPL shares have fallen around 5% year-to-date.

Also See: NFLX Stock Sinks Over 8% After-Hours — Q2 Revenue Miss And Q3 Weak Guidance Weigh On Netflix Shares 

For updates and corrections, email newsroom[at]stocktwits[dot]com.