Nice post Invader! I agree that the $60 lowball should not be taken seriously...I will be following to see if they hold out for a higher offer or simply ignore it and continue doing what they are doing
Interesting read and I agree: PYPL has many challenges to overcome. I usually look at companies by focusing on the numbers and the biggest question mark is certainly the declining growth rate. However, we see stable cash flows, rising margins and improving capital efficiency which signals that the business isn't dead. A PE of 7.5x or a FCF yield above 14% price it like these metrics didn't exist.
The part I’m less convinced by is the idea that PayPal’s pieces automatically deserve their standalone values in a sale.
A breakup can expose hidden value, but buyers do not pay you for every synergy you imagine. They pay for the piece that improves their economics, then discount the integration, overlap, and regulatory risk.
That is what makes a PayPal auction interesting. The company may be worth more in pieces—but not necessarily to the same buyer.
The real upside comes if multiple bidders want different parts badly enough to compete against each other.
i think you make good points. but 60.50 or whatever per share IS too cheap! the stock traded steadily above $65 dollars last year and since then I think the story has honestly just gotten better.
everyone could use $6.5B or something in FCF. even this low bid proves that the platform is undoubtedly worth something. While $100 for the entirety of PYPL is on the higher end and maybe even a stretch (20 P/E with no growth) i consider $70-80 to be fair.
just because PYPL failed to utilize these assets to their advantage doesn’t mean other can’t. $100 might be a fairytale but it’s not impossible.
Interesting read and I agree: PYPL has many challenges to overcome. I usually look at companies by focusing on the numbers and the biggest question mark is certainly the declining growth rate. However, we see stable cash flows, rising margins and improving capital efficiency which signals that the business isn't dead. A PE of 7.5x or a FCF yield above 14% price it like these metrics didn't exist.
The part I’m less convinced by is the idea that PayPal’s pieces automatically deserve their standalone values in a sale.
A breakup can expose hidden value, but buyers do not pay you for every synergy you imagine. They pay for the piece that improves their economics, then discount the integration, overlap, and regulatory risk.
That is what makes a PayPal auction interesting. The company may be worth more in pieces—but not necessarily to the same buyer.
The real upside comes if multiple bidders want different parts badly enough to compete against each other.
Nice post Invader! I agree that the $60 lowball should not be taken seriously...I will be following to see if they hold out for a higher offer or simply ignore it and continue doing what they are doing
okay…. we’re good 🐐
❤️
Interesting read and I agree: PYPL has many challenges to overcome. I usually look at companies by focusing on the numbers and the biggest question mark is certainly the declining growth rate. However, we see stable cash flows, rising margins and improving capital efficiency which signals that the business isn't dead. A PE of 7.5x or a FCF yield above 14% price it like these metrics didn't exist.
there is a chance the deal falls through and we're back into mid 40s again, but even then it's not completely over. i'm taking the shot.
The part I’m less convinced by is the idea that PayPal’s pieces automatically deserve their standalone values in a sale.
A breakup can expose hidden value, but buyers do not pay you for every synergy you imagine. They pay for the piece that improves their economics, then discount the integration, overlap, and regulatory risk.
That is what makes a PayPal auction interesting. The company may be worth more in pieces—but not necessarily to the same buyer.
The real upside comes if multiple bidders want different parts badly enough to compete against each other.
i think you make good points. but 60.50 or whatever per share IS too cheap! the stock traded steadily above $65 dollars last year and since then I think the story has honestly just gotten better.
everyone could use $6.5B or something in FCF. even this low bid proves that the platform is undoubtedly worth something. While $100 for the entirety of PYPL is on the higher end and maybe even a stretch (20 P/E with no growth) i consider $70-80 to be fair.
just because PYPL failed to utilize these assets to their advantage doesn’t mean other can’t. $100 might be a fairytale but it’s not impossible.
Interesting read and I agree: PYPL has many challenges to overcome. I usually look at companies by focusing on the numbers and the biggest question mark is certainly the declining growth rate. However, we see stable cash flows, rising margins and improving capital efficiency which signals that the business isn't dead. A PE of 7.5x or a FCF yield above 14% price it like these metrics didn't exist.
The part I’m less convinced by is the idea that PayPal’s pieces automatically deserve their standalone values in a sale.
A breakup can expose hidden value, but buyers do not pay you for every synergy you imagine. They pay for the piece that improves their economics, then discount the integration, overlap, and regulatory risk.
That is what makes a PayPal auction interesting. The company may be worth more in pieces—but not necessarily to the same buyer.
The real upside comes if multiple bidders want different parts badly enough to compete against each other.