Michael Burry Calls Stripe-Advent's $60.50 PayPal Bid Too Low as Shares Jump 17%
Updated
Updated · The Motley Fool · Jul 16
Michael Burry Calls Stripe-Advent's $60.50 PayPal Bid Too Low as Shares Jump 17%
3 articles · Updated · The Motley Fool · Jul 16
Summary
$60.50 a share is "simply too low," Michael Burry said of Stripe and Advent International's cash offer for PayPal, arguing he will not sell and sees it as only an opening bid.
Burry said a full-company takeover should carry a control premium well above his IV15 benchmark, putting a realistic buyout closer to about $100 a share and within his broader $75-$115 valuation range.
PayPal's own metrics also make the $53 billion offer look light: the bid is still about 24% below the stock's $79.50 52-week high and values the company at less than 8 times annualized adjusted free cash flow.
The case for a higher price is tempered by weak growth—first-quarter revenue rose 7%, transaction margin dollars 3%, and active accounts just 1% to 439 million—while full-year EPS guidance ranges from slightly down to slightly up.
PayPal shares closed at $55.52, about 8% below the offer after a 17% surge, signaling doubts the deal closes at current terms before the board meets as soon as July 20.