Massive News for PayPal Stock Investors! | PYPL Stock Analysis
Summary
Parkev discusses the significant news regarding a potential acquisition of PayPal by Stripe and Advent for $53 billion. This bid represents a small premium over PayPal's recent market capitalization, and Parkev notes that while this could spark a bidding war or further negotiations, he remains a frustrated shareholder. Parkev has owned the stock for over two years and highlights a consistent lack of progress in the company's turnaround efforts and leadership strategy.
Despite the current share price of approximately $55, Parkev's updated discounted cash flow model suggests an intrinsic value of $81 per share. This indicates roughly 40% upside to fair value, yet Parkev is prepared to exit the position. Parkev believes the low forward price-to-earnings ratio of 9.6 reflects the market's extremely low expectations for growth and a loss of confidence in the company's ability to maintain market share.
Mentioned Stocks
Reasoning: Parkev intends to sell his PayPal shares because he is disappointed with the management's failure to execute a successful turnaround strategy over the past two years. Although Parkev calculates an intrinsic value of $81 per share—suggesting the stock is undervalued at its current $55 price—Parkev believes the acquisition news provides a good opportunity to exit the position. Parkev points out that the low forward P/E ratio of 9.6 indicates the market has lost faith in PayPal's growth prospects.