PayPal’s management has expressed interest in making quality acquisitions, which has contributed to the company’s recent stock rise. There is speculation that PayPal might soon purchase another company or even get acquired itself.
Potential European Candidates
Analyst Lisa Ellis from Bernstein suggests that a deal is probable “in the coming months” and has identified potential candidates. In Europe, Adyen stands out as an ideal option. Adyen is a platform that allows businesses to accept online payments. Additionally, Klarna, a Swedish e-commerce company, could be a valuable acquisition for PayPal. Klarna offers customers the option to pay after an item has been delivered.
Adyen is often hailed as the “Braintree of continental Europe,” referring to PayPal’s own payment processing service used by Uber and other businesses. Acquiring Klarna would strengthen PayPal’s credit operations in Scandinavia.
Domestic Possibilities
While European acquisitions seem promising, there are also notable domestic options. A potential target for PayPal could be Stripe, a direct competitor to Braintree. Another possibility is Square, a well-known payment services company.
Positive Outlook for PayPal
Ellis believes that a strategic acquisition would benefit PayPal’s stock, especially if it enables geographic expansion or drives user engagement. These factors are crucial for PayPal’s long-term growth.
In conclusion, PayPal’s quest for quality acquisitions is expected to lead to a significant deal in the near future. While European companies like Adyen and Klarna seem to be excellent choices, domestic options such as Stripe and Square should not be overlooked. Ultimately, a well-executed strategic acquisition will boost PayPal’s stock and contribute to its overall growth.
PayPal’s Unlikely Acquisition Prospects
Despite having a strong portfolio of business lines that would typically attract big tech or financial companies, it is highly unlikely that PayPal will be acquired. The reason for this lies in PayPal’s strategy of partnering with everyone, which has been a significant factor in the company’s success.
Previously, there was speculation about a potential merger with American Express. However, this option seems less feasible now that PayPal has established partnerships with Visa and Mastercard. While a partnership with Alipay, owned by Ant Financial (an affiliate of Alibaba), would have obvious synergies, it is unlikely that regulators would approve such a combination.
Furthermore, with the stock value already surging over 60% this year, there are few companies willing and financially capable of paying a significant premium above PayPal’s $75 billion market value to strengthen their presence in the payments industry.
As a result of these factors, an analyst predicts that PayPal will most likely make an acquisition of its own in the coming months. This move would enable PayPal to enhance its position further in the market.
Correction: Alipay’s ownership has been clarified in an updated version of this story.
