Stripe and Advent International have reportedly joined forces to present a buyout proposal for PayPal Holdings Inc. valued at about $53 billion. The joint offer is priced at $60.50 per share, which equates to a 28% premium to the last reported closing price of $47.37.
Investor Michael Burry pushed back immediately, contending the proposal underestimates PayPal's intrinsic value. Burry, who has recently elevated PayPal among his core deep-value holdings, dismissed the $60.50 figure as an opening bid that falls short of a fair takeover price.
"The bid is at 1.21x IV15 and simply too low," Burry wrote, invoking his internal valuation framework. "This validates the value in PayPal, and I believe the bid will have to rise."
In his remarks, Burry laid out valuation checkpoints he says indicate a materially higher baseline than the proposed offer. Working from his proprietary intrinsic-value calculations, he provided a range of benchmarks he believes should inform any competitive bid:
- IV10 valuation: Burry places PayPal's baseline intrinsic value between $75 and $80 per share.
- IV8 valuation: Under a different intrinsic-value horizon, he pushes the baseline to between $110 and $115 per share.
- Combined with a control premium: Using his IV10 calculation plus a conventional control premium, Burry suggests a realistic winning bid would be in the neighborhood of $100 per share.
For Burry, the headline $53 billion figure is only a starting point for negotiations. "$60.50 is just too low. I am not selling, and I believe it is only an opening bid," he said, implying that potential acquirers would need to substantially raise their offer to secure control of the company.
The reported Stripe-Advent offer and Burry's public response highlight a valuation gap between the acquirers' proposed price and at least one influential investor's assessment of PayPal's intrinsic worth. If Burry's valuation framework resonates with other large shareholders, prospective buyers may face pressure to increase their bid to secure enough support for a transaction.
Market participants following the situation will likely watch both shareholder reactions and any follow-up from Stripe and Advent for indications of whether the proposal will be revised upward. As presented, the offer at $60.50 per share reflects a material premium to recent market levels, but remains below the intrinsic-value ranges that Burry says justify a much higher takeover price.
Bottom line: A reported $53 billion takeover proposal values PayPal at $60.50 per share, but Michael Burry has publicly criticized that figure as inadequate based on his internal valuation metrics, and he contends a winning bid should be considerably higher when accounting for control premiums.