Stripe's $60.50 Bid for PayPal: Why Michael Burry Says It's Too Low

TL;DR Stripe and Advent International have offered to buy PayPal outright at $60.50 per share, valuing the company north of $53 billion, with roughly $50 billion in committed bank financing behind it. The stock jumped 14% and still sits near $54. Michael Burry says the bid has to rise, and on this one I think he is right.

A competitor just offered to buy the whole company

The news breaks down to a single sentence. Stripe — one of PayPal's most effective competitors — has teamed up with private equity firm Advent International to acquire all of PayPal at $60.50 per share.

That values the entire business at more than $53 billion. Stripe and Advent would each hold 50%, and the structure comes with about $50 billion in committed bank financing.

That last detail is the first thing I checked. Committed financing means this is not an exploratory "we'd be interested" letter. Banks have already signed up to the funding terms, and the buyers have already spent real money on diligence and legal work. This is a loaded offer, not a trial balloon.

The stock popped 14% on the news.

A 14% pop is not a recovery

Step back and the picture changes.

Even after that jump, PayPal trades 25% below where it was a year ago. Set against the all-time high of $310 from 2021 — peak pandemic, near-zero rates, anything with "fintech" attached flying — it is a different universe entirely.

So what is really on the table is a premium applied to an asset that has already fallen more than 80% from its high. Where you anchor the word "premium" changes how generous this offer feels.

How PayPal got here

One word: competition. And not from one direction — from all of them.

Apple Pay is baked into every iPhone. Block, the company behind Square and Cash App, has taken share. Affirm and Klarna built out buy-now-pay-later and pulled younger shoppers with it. Shopify built its own payments stack.

And here is the irony. Stripe, the company now bidding for PayPal, has been one of the competitors steadily eating into PayPal's business for years.

Payments went from PayPal being the obvious king to PayPal being one of many. The market punished the stock accordingly.

Why Michael Burry refuses to sell

This is where it gets interesting.

Michael Burry — yes, the one from The Big Short — owns PayPal at an average cost of roughly $49 per share. At $60.50 he is sitting on about a 22% gain. He has publicly said he will not take it.

His wording: he believes the bid will have to rise, the company sits well below intrinsic value, and any successful bid should be well above intrinsic value to account for the control premium.

Translated: first, $60.50 does not even reach fair value. Second, if you want 100% of a business — full control, answering to no one — you pay extra for that privilege on top of fair value. Burry puts PayPal's intrinsic value between $75 and $115 per share and thinks a realistic winning bid lands closer to $100.

I think the framing is exactly right. When you judge a takeover price, the reference point is not yesterday's close. It is the present value of the cash that business will produce. Anchor to yesterday's close and you have already accepted three years of market pessimism as the correct starting price.

The most useful signal is that the stock is still at $54

Here is the underrated detail in this story.

The offer is $60.50. The stock trades near $54. That leaves a spread of more than 10% sitting there after the deal was announced.

Merger arbitrage capital does not usually leave that kind of gap alone. If it persists, there is one explanation: the market does not price this deal at a 100% chance of closing. A competitor buying a competitor invites serious antitrust scrutiny, the board may reject the price outright, and financing terms can shift.

So today's price is not "a $60.50 company." It is a blend of the odds of collecting $60.50 and the odds of falling back to where the stock was before the leak.

What actually matters most in this news

It is not the price.

It is that the competitor who has genuinely been taking PayPal's share showed up with $50 billion of committed capital and said, we want to own the whole thing.

The market narrative was that PayPal is structurally losing. And then the company that narrative crowned as the winner arrived with $53 billion to buy the supposed loser. That is a real-money validation of business quality. It carries more weight than a hundred analyst notes.

What shareholders should watch now

Four things are on my checklist.

1. Does a competing bid appear? Once a deal goes public, other private equity firms and strategic buyers have a reason to enter. This is the scenario Burry is playing for.
2. How the board formally responds. Forming a special committee, rejecting outright, or opening negotiations each point the price in a different direction.
3. Regulatory risk. A competitor combination means a longer antitrust review, and a longer review means a wider spread.
4. Your plan if the deal dies. This is the important one. If the bid collapses, the stock likely retraces. You need a reason to hold that has nothing to do with the offer.

A takeover bid is not a thesis. It is an event that confirms or refutes one. Blur that line and the moment the deal breaks, your reason for owning the stock breaks with it.

I have gone deeper on the underlying business in PayPal's three-part undervaluation case, and on how Burry structures positions like this in Michael Burry's whale fall thesis.

FAQ

Q: Should I sell into the $60.50 offer? A: That decision should come from your own intrinsic value estimate, not from the bid. If your math says fair value is below $60, this is a good exit. If your math says $100+, you are giving up the rest to lock in 22%. And note: with the stock at $54, selling today means selling at $54, not $60.50.

Q: How far does the stock fall if the deal collapses? A: The base case is a retrace toward the pre-announcement level around $47–48. Worth remembering that at that price the stock traded below 8x free cash flow. A broken deal is not automatically the worst outcome.

Q: Why does the control premium have to be added on top of fair value? A: Buying 1% of a company and buying 100% are different products. Full ownership means you control capital allocation, management, and the timing of any exit. That authority has a price. Which is why buying a business worth $100 for exactly $100 is a good deal only for the buyer.

Q: Why would Stripe buy a competitor it is already beating? A: Taking share and owning the network are different speeds. Acquiring PayPal's two-sided merchant-and-consumer network plus Venmo in one move can compress years of competition into a single transaction. That calculation is itself evidence of what the PayPal network is worth.