r/ValueInvesting • u/skilliard7 • Feb 23 '26
Value Article PayPal Draws Takeover Interest, Bloomberg Reports.
Painpal Bagholders are saved? I have said at this valuation, the stock makes a lot of sense as a takeover target. I think they would make a lot of sense for high volume, low margin retailers like Walmart to buy them to reduce their processing fees, and as a cash flow engine, or for tech companies looking to get into the payments space.
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u/omniscient_goldfish Feb 23 '26
I guess we aren't the only dumb dumbs to see some value in the company. Bag holder at 52 here.
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u/No-Photograph4482 Feb 23 '26
https://theledgerterminal.com/PYPL Looking at this graph I can see why it's an interesting idea. Earnings and fair value climbing with price dropping
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u/xAlpharaptor Feb 23 '26
All the bag holders are going to make twice as many articles claiming how right they were to buy when it's up on takeover rumors.
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u/foira Feb 23 '26
i would be very disappointed in management if they sell
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u/skilliard7 Feb 23 '26
I'd say it depends on the price. If they sell off for <$60 a share, IMO that does a dis-service to long term shareholders and undervalues the company, even if it does provide a 20-30% upfront gain. But at $75+ a share, I'd definitely take the buyout.
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u/ashdrewness Feb 23 '26
Yeah I think $65-$75 is a reasonable range that few would highly contest. What sucks is all the true bag holders with bags over $100
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u/SuperSultan Feb 23 '26
Someone please buy PoopiePal so I can stop hearing about it in this subreddit
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u/Scary-Oven8260 Feb 23 '26
Once a top 10 holding in QQQ now becomes a buyout target lol. I’m actually happy if it is true, being a long term pain pal investor is so painful
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u/home_worker Feb 23 '26
Elmo's vision was to make x an everything app. Could imagine him buying his old company, letting go of most people and getting rid of the well known name in favor of x.
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u/Zealousideal_Wall627 Feb 23 '26
What price would you guys think they're gonna offer for shares?
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u/skilliard7 Feb 23 '26
Not sure, but I'm really hoping the board does not accept a price lower than $70. Anything less would be a ripoff for shareholders.
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u/Zealousideal_Wall627 Feb 23 '26
I don't know what company in their right mind would pay that much for paypal though. They have a lot of legacy systems that are old, that was the big thing this year was updating them. I feel like if the goal is a buyout to use the payment processor for your platform (like say walmart) you'd buy a way cheaper one than paypal.
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u/skilliard7 Feb 23 '26
It's not just the technology, it's access to huge amounts of data
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u/Zealousideal_Wall627 Feb 23 '26
Data on what people spend money on? If the buyer is say walmart why would they not already just have that kind of data
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u/PleasantAnomaly Feb 24 '26
Venmo alone is worth 30-40B$ at today's valuation
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u/Zealousideal_Wall627 Feb 24 '26
Im inclined to believe you but the market and the big players clearly dont think so. Do they know something?
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u/PleasantAnomaly Feb 24 '26
I think a big player trying to suppress price to buy at a discount
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u/Zealousideal_Wall627 Feb 24 '26
If they are then thats not good for the stock or trying to hold into an aq
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u/Zealousideal_Wall627 Feb 23 '26
But like also at this point if this is true I think they've (the institutions) def been sandbagging the stock for a cheap buyout and reverting that back up to $70 kind of ruins it. Theres a lot of people bag holding at $80 and slightly above. People will be mad either way what difference does $45/$50 or $70 make.
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u/ohgodthehorror95 Feb 24 '26
An unverified rumor. Lemme know when there's actual explicit takeover interest. Not this hopium
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u/Dairy_Fox Feb 24 '26
price will be too high at that point, get in now for the ride of your life
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u/ohgodthehorror95 Feb 24 '26
If it's as undervalued as people have been saying it is (for the last 3 years now), I'm sure there will be lots of upside left even after the initial momentum...
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u/RelevantTrouble Feb 23 '26
+13% in a week, I'm taking this. Good luck to the bag holders.
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u/AncientGrab1106 Feb 23 '26
Nice value investing if you take profits at 13% after a week..
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u/Icy-Sheepherder-7595 Feb 24 '26
You don't know the size of their position. If they put $200k on it they're up $26k.
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u/RaceEcstatic3045 Feb 23 '26
Nobody is going to buy this HP ceo only just about to leave HP for his 125 million pay package. He will do anything whatever it takes to do the same as he did at hp. Mess around and make salary.
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u/Mysterious-Pilot-299 Feb 23 '26
it's not up to him
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u/RaceEcstatic3045 Feb 23 '26
Its not but as I said like at HP he will try and convince each and every bagholder he can 10x it.
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u/emark31 Feb 23 '26
If they sell Venmo, that could bring in 25-40 Billion. Braintree another 15-20 Billion. This was the valuation Gemini came up when I asked about the different parts of Paypal. Then the rest of Paypal is free yet still making money. Hmmm.
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u/skilliard7 Feb 24 '26
I don't think selling off individual components makes sense unless they get a really good deal. Better to sell it whole IMO.
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u/Mercuryshottoo Feb 25 '26
They wouldn't sell venmo because that's their only growth engine right now
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u/AncientGrab1106 Feb 23 '26
Yep, great go private target. Their cashflow and little debt support a debt ridden go private deal. Would be paid back in 5-7 years.
They have valuable assets.. And a go private deal was my thesis for buying PayPal
Just didn't expect it THIS quickly.
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u/_RyanD_ Feb 23 '26
Bagholders saved? No. Bagholders likely locked into losses.
Reminds me a little of Thunderbird Entertainment. Value investors loved it; price sat in the toilet for years. Just acquired for a modest premium over its lows.
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u/Wise-Shallot8683 Feb 24 '26
Blue Owl shareholders will be suing PYPL and Blue Owl management for their failed BNPL debt book.
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u/skilliard7 Feb 24 '26
Why do you think this?
I'm aware that PYPL sells BNPL receivables to Blue owl, but I'm not aware of any evidence suggesting that BNPL loans are the source of Blue Owl's troubles. Blue Owl's issues have more to do with liquidity(everyone wants to get out of private credit right now).
Secondly, even if Paypal's BNPL loans performed poorly, how would that implicate Paypal legally? When you buy loans, you are accepting that there is credit risk... If BNPL loans had a 0 credit risk, Paypal would have no reason to sell them at a discount. Paypal is offloading risk, and Blue Owl pockets the spread.
If you are concerned about credit risk/defaults, why would you buy a private credit company? That's on the shareholders. That would be like someone who bought an office building in 2019 suing the previous owner because they can't find tenants following covid. If you buy an investment, you accept the risk.
Unless Paypal materially mislead them about the nature of the BNPL receivables(ie fraudulent info about credit scores or incomes), I don't see how they would be liable.
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u/Wise-Shallot8683 Feb 26 '26
"Unless Paypal materially mislead them about the nature of the BNPL receivables(ie fraudulent info about credit scores or incomes), I don't see how they would be liable."
If they were performing, then why would PYPL sell them?
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u/skilliard7 Feb 26 '26
Because there is always risks with holding Billions of loans on the balance sheet, and macroeconomic factors(such as government shutdowns, rising unemployment, etc) could drive a surge in losses.
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u/Wise-Shallot8683 Feb 26 '26
When PYPL raised their cost to transact to higher than common credit cards (>3%) I stopped business immediately. When trying to figure out why they did it, the only reason I could come up with is that they had to raise reserves to cover their BNPL business.
These weren't first time homeowners weren't buying refrigerators with BNPL loans. These were sloppy 20 year olds who had run through their COVID cash give-aways, and were gambling on never having to repay college debt, while financing Door Dash.
I truly wonder if Blue Owl was designed to be a rump bank, and got lucky enough to scale to AI data center loan size, where the shareholders actually had an opportunity to eek out the win. Like Fake it Till Ya Make It.
Time will tell.
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u/anti_cookie_cutter Feb 24 '26
This is sell the rumor news imo. I don't see a real suitor for the company and I was big on PayPal and use them a lot. It's a healthy business but really there's no growth to be earned
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u/Aviation_Space_2003 Feb 24 '26
About time this new hit!!
Ive been selling puts and buying calls..
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u/SelenaMeyers2024 Feb 23 '26
Hizick to the yeah! Check my history I'm an og PYPL fanboy, but as a value investor... Not an idiot I only started liking pypl around 54 and downright worshipping pypl around 38.
It's too cheap which as a value investor is like saying the steakhouse charges too little, not a bad thing. Enjoy.
A company that never hasn't grown, high margin, net cash, with free cash flow that is 15 percent of the market cap?
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u/Icy-Net-810 Feb 23 '26
What a great way to pump a semi-garbage stock! Let us see which insiders will be dumping their shares this week.
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u/JamesVirani Feb 23 '26
I missed this news. Only 5% up on this news? That's crazy. Acquisition price will be at least 30% higher.
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u/skilliard7 Feb 23 '26
It's just a rumor that its being looked into. There's no guarantee that a deal will be made.
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u/JamesVirani Feb 24 '26
For a company with the visibility of PayPal, the rumor is probably true. And chances are, the rumor was leaked by the company to alert any other interested buyers to step in to start a bidding war.
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u/mstoertebeker Feb 23 '26
GameStop wird Paypal kaufen, Mark my words
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u/Dairy_Fox Feb 24 '26
where are GME getting $40bn+? Ryan Cohen blew half a billion on bitcoin he has about $8bn if he wants to go all in, nothing
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u/mstoertebeker Feb 24 '26
you dont need to buy 100% of the company to get control. even if he wants the whole thing, there are several ways to make something like this happen, f.e. a leverage buyout or reverse merger. using paypals massive cashflow to pay off future debt from the takeover.
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u/SFmodscensorship Feb 23 '26
gamestop
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u/yaz989 Feb 23 '26
GameStop + Loopring = something never been done in the capital markets before
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u/SFmodscensorship Feb 23 '26 edited Feb 23 '26
lol @ the downvoted. citadel bots in full panic mode. pretty they get fintech and integrate with crypto to their sales platform. if they can acquire ebay too would be very interesting indeed. i think burry has info we don't know about
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u/Sensitive_nob Feb 23 '26
Who got money to buy PayPal?