According to ARK Investment Management’s Research Analyst Varshika Prasanna, although PayPal’s merchant scale is significant, Venmo would give Stripe access to more than 400 million consumer accounts.

  • The analyst said if the acquisition goes through, Venmo would help Stripe create one of the world's largest two-sided payments ecosystems, reshaping consumer payments in the U.S. and globally.
  • Meanwhile, partnering with Advent makes strategic sense for Stripe, Prasanna said, noting that the private equity firm would help with restructuring and operational improvements.
  • A recent Reuters report said that PayPal’s board views the $53 billion takeover offer as inadequate and that the proposal undervalues PayPal.

Shares of PayPal Holdings Inc. (PYPL) have jumped more than 31% so far in July, putting the company on track for its best month on record if the gains hold. 

The massive uptick followed a reported joint acquisition bid for the company from private payments firm Stripe and Advent ​International at a price of $60.50 per share. 

According to ARK Investment Management’s Research Analyst Varshika Prasanna, although PayPal’s merchant scale is significant, “Venmo is likely PayPal’s most compelling strategic asset,” which would give Stripe access to more than 400 million consumer accounts.

The analyst said in a weekly newsletter that if the acquisition goes through, alongside a strong merchant network, “Venmo would help Stripe create one of the world's largest two-sided payments ecosystems, reshaping consumer payments in the U.S. and, longer term, perhaps globally.”

The Strategic Value Of Consumer Payments

Prasanna also said that the bid comes at a time when payment companies are experiencing an inflection point. The analyst said that in 2025, Stripe’s $1.9 trillion in payments processed surpassed PayPal's $1.79 trillion for the first time.

In case of an acquisition, “the companies would be processing ~$3.7 trillion, roughly ~3% of global Gross Domestic Product (GDP), making Stripe the largest US merchant acquirer globally,” she said. 

Meanwhile, partnering with Advent makes strategic sense for Stripe, as per the analyst. Given that PayPal is a mature technology company with around 24 thousand employees and a legacy tech stack that may require significant restructuring before an integration with Stripe, “Advent’s private equity expertise would focus on restructuring and operational improvements, while Stripe integrates PayPal's merchant and consumer platforms.”

The Pertinent Question: Will PayPal Close The Deal?

As per Prasanna, PayPal is still trading at a discount to the reported offer price, “suggesting at first glance that shareholders doubt the deal will close at the current valuation and that a bidding contest is unlikely.”

At the time of writing, the reported deal would offer a premium of 6.5% compared to PYPL’s last close. 

“Combining its merchant infrastructure with PayPal's consumer network, Stripe would become one of the strongest vertically integrated, two-sided payments platforms in the world,” Prasanna said. 

However, the deal closure would depend on whether PayPal’s board and shareholders give Stripe and Advent the chance “to capitalize on that opportunity,” she concluded. 

Meanwhile, a recent report from Reuters said that PayPal’s board views the $53-billion takeover offer from Stripe and Advent as inadequate, and that the proposal undervalues PayPal.

PYPL Stock: Valuation 

PayPal currently trades at a forward price-to-earnings multiple of 10.5x, near its all-time low levels and also significantly below its peers. For context, companies like Affirm Holdings (AFRM) and Wise Group PLC (WSE) trade at forward valuation multiples of 20.1x and 21.1x, respectively.

Wall Street is split on the deal. Morgan Stanley said last week that a sale to the Stripe-Advent consortium is PayPal's most credible route to unlocking shareholder value, arguing the company has few standalone catalysts to meaningfully accelerate long-term growth. The firm maintained its ‘Underweight’ rating and $34 price target. 

Meanwhile, Cantor Fitzgerald said its sum-of-the-parts analysis values PayPal at around $70 per share, suggesting the reported $60.50-a-share bid undervalues the company. Barclays upgraded PayPal to ‘Equal Weight’ from ‘Underweight’, saying takeover speculation limits near-term downside despite unchanged fundamentals.

PYPL Stock: Retail Stance

On Stocktwits, retail sentiment around PYPL stock was ‘extremely bullish’ at the time of writing, amid ‘extremely high’ message volumes. 

One bullish user said, “pypl obviously not gonna take the bid. by end of 2028, if stock price stays at 55, assuming continued 6B buy back; a 54Billion buy out is a $100 dollar stock price. By 2030, it's $170; not accounting for any p/e rerating.”

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Another user said, “Buyout offer should be at least above the 52w high at 79.5 + 10 - 20% premium. Anything below is daylight robbery.”

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PYPL stock is down about 24% in the last year. 

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