Is Stripe going to acquire PayPal? Semafor report makes big revelation

Setting aside earlier rumours suggesting that PayPal was in talks to sell itself, a recent report by Semafor found out that neither Stripe nor anyone else is considering to acquire PayPal.

PayPal has been working for months with bankers in preparation for an activist campaign or unwanted takeover bid, the Semafor report added, citing people familiar with the matter.

Why was PayPal considering acquisition?

The purported sell-off was driven by a steep decline in PayPal shares that executives feared could leave the company vulnerable, Semafor sources explained.

PayPal's former CEO, Alex Chriss, who was ousted earlier this year, began collaborating with bankers in this regard.

Bloomberg recently reported that Stripe was considering an acquisition of all or parts of PayPal this week, while the incoming CEO, Enrique Lores, is scheduled to assume office next week.

Even in the wake of Stripe's interest, acquiring a large public company like PayPal could entail profound challenges, as privately held companies often struggle to make such acquisitions, particularly if the target company is not inclined to sell.

In case it goes for the purchase, Stripe would need debt commitments, as it cannot use its own shares for the purpose.

PayPal's customer base

Stripe's inclination towards PayPal seems to be driven by its massive customer base and well-established payment infrastructure. But any serious discussions between the two companies would require a clear direction from PayPal's new leadership and the resolution of the ongoing uncertainty.