Payment processor Stripe apparently wants to take over PayPal

Among the interested parties in an acquisition of PayPal is payment processor Stripe, which could buy the entire payment service provider. Bloomberg reports, citing informed sources. However, negotiations are still in a very early stage. There is no certainty that they will lead to a purchase. Nevertheless, the report has further boosted PayPal's stock price. The shares are about 14 percent pricier than a week ago. Stripe itself is now worth 159 billion US dollars, according to Bloomberg. One of the founders acknowledged the difficult situation at PayPal in an interview.

Expectation of an acquisition boosts the stock

Bloomberg only made public earlier this week that several companies are interested in acquiring PayPal or parts of the payment provider. PayPal itself has reportedly already started talks with banks. Because customers are “increasingly resorting to alternative payment methods,” the payment provider is in a dead end, the financial magazine explained. This primarily concerns lost market share to Apple Pay and Google Pay. While PayPal's stock price was still over 78 US dollars a year ago, after a long decline it had fallen below 41 US dollars a week ago. The expectation of an acquisition then boosted it again. Most recently, the shares cost 47 US dollars.

Due to the negative business development at PayPal, the CEO was already dismissed at the beginning of February with immediate effect. Next week, the current chairman of the board of directors will take over. However, this did not calm the stock markets either; quite the contrary. After this abrupt change in leadership alone, the stock price plummeted by almost 20 percent. Investors were also dissatisfied with PayPal's vague outlook. Stripe was founded in 2010 in Palo Alto by Irish brothers Patrick and John Collison. The company, based in San Francisco and Dublin, processes payments and has not yet been directly involved in business with consumers.

(mho)