For many years PayPal It was one of the biggest success stories of global financial technology (fintech), as the company that essentially established electronic payments and connected to the explosion of e-commerce.
PayPal came in 2021 to be valued at $360 billion, becoming one of the most expensive and most popular companies in the electronic payment sector. But today the picture is completely different, as its stock value has declined to such a degree that its leaders show to think of its acquisition instead of about 53 billion dollars.
The proposal has been tabled by the Strip, in cooperation with the investment fund Advent International, and assesses PayPal at $60.50 per share, Reuters reports. Although this value It would seem «Funny.» until a few years ago, now it seems to be responding to the real value of once all-powerful PayPal.
However, the Board of Directors is very difficult to support an agreement that assesses PayPal at 53bn. dollars, according to Reuters sources, although the possibility is not excluded to make this price a starting point for negotiations. Wall Street analysts estimate that Stripe and Advent can offer a higher price as they have already raised $50 billion bank financing and are likely to improve their offer.
The biggest shock in her history
Paypal since 1998 established has been steadily developing. He was admitted to the stock exchange in 2002, was acquired by eBay that same year and was independent in 2014-2015 now operating as an autonomous company. The size of «They took off.» 2020 during Covid pandemic, when the total volume of payments rose by 31%, reaching $936 billion, while revenue was boosted by 21%, at $21.45 billion. At the same time, 72.7 million new active accounts were added, raising all users to 377 million.
The upward march continued in 2021. The payment volume first exceeded 1.25 trillion. US dollars, an annual increase of 33%, revenues amounted to $25.4 billion, while active accounts reached 426 million. Investors then considered that turning to electronic transactions would be of a permanent nature, which led PayPal's share to historically high and its stock value near $360 billion in the summer of 2021.
However, return of economic activity to normality, the extremely high growth rates were not maintained. The increase in electronic markets slowed down, competition from services such as Apple Pay, Stripe and other platforms intensified and investors began to review their expectations for the company's future development.
Competition and business failures
The most important blow for PayPal It came from strengthening Apple's technological ecosystemApple Pay managed to gain a greater market share in electronic payments in the US, surpassing PayPal by about 10 percentage points, which changed the balance in a market where PayPal was for years the unquestionable leader.
At the same time, competitors such as Shop Pay, Klarna and other digital payment and market financing services were strengthened, limiting the company's competitive advantage.
Analysts estimate PayPal made a number of wrong strategic choices. For years it focused on increasing the number of users and market share, offering highly competitive prices, but without turning this growth into a corresponding increase in profitability.
The company failed to use in time new trends such as digital banking, artificial intelligence applications in payments and the so-called agent commerce, i.e. autonomous markets carrying out AI systems on behalf of consumers. At the same time, the significant investments made in the Venmo application and Buy Now and Pay Later services did not yield the expected.
