Cantor Fitzgerald on Thursday circulated a client note that reexamines the potential take-private offer for PayPal Holdings Inc. Using a sum-of-the-parts framework, the firm concluded that a bid nearer $70 per share could better reflect PayPal's intrinsic value than the $60.50 per share figure that has circulated in media reports.
The analysis referenced recent reporting from CNBC that a consortium including Stripe, Block and Advent International is said to be organizing to acquire PayPal for roughly $53 billion, or about $60.50 a share. Cantor stated it does not have independent confirmation of those media details and framed its work around the core question of whether the reported amount would be sufficient to secure a deal.
To address that question, Cantor analyst Ramsey El-Assal assembled earnings contribution estimates across PayPals primary operating segments. The firm separately modeled Venmo, Branded payments, Unbranded/Braintree, and Other peer-to-peer activities as distinct contributors to overall value.
Cantor first constructed what it calls a "Deal" case, effectively backing into the assumptions that would support the existing $60.50 per share bid. It then produced a peer-multiple-based sum-of-the-parts valuation, which implied that "perhaps a ~$70/share offer might more fully reflect the intrinsic value of the company."
Beyond headline valuation, Cantor highlighted potential ripple effects across the payments ecosystem should such a transaction proceed. The firm pointed out that PayPal's model relies on external processing partners, naming Global Payments and Fiserv as key processors. Those companies are direct competitors to Stripe on the payments processing side, Cantor noted.
On the card issuance and processing front, Cantor flagged that Synchrony issues and processes the PayPal Mastercard credit card, while The Bancorp Bank issues and processes PayPal and Venmo debit cards. The note observed that Stripe is a smaller competitor relative to those banks on the card issuer processing side.
The firms commentary thus covers both a valuation perspective - questioning whether the reported bid fully captures intrinsic worth - and a market-structure perspective regarding how a sale could affect relationships among processors, card issuers, and a potential new owner that counts some processors as competitors.
Key points
- Cantor Fitzgeralds sum-of-the-parts work suggests a possible PayPal offer closer to $70 per share, above the reported $60.50 bid.
- The firm modeled contributions from Venmo, Branded payments, Unbranded/Braintree, and Other P2P to build both a "Deal" case and a peer-multiple-based alternative valuation.
- Cantor cautioned the transaction could have downstream impacts on payments processors and card issuers, including Global Payments, Fiserv, Synchrony and The Bancorp Bank.
Risks and uncertainties
- Cantor does not have independent confirmation of the reported consortium bid details, leaving the underlying transaction terms unverified - affects M&A and fintech sectors.
- How a sale would alter commercial relationships among PayPal, processing partners, and card issuers is unclear and could create integration or competitive frictions - affects payments processors and banks.