PayPal stock is crushed and they’ve been posting declining EPS for a few quarters now due to eBay and free money government shit show ending. The payments fintech sector is an absolute cess pool of competition and must consolidate at some point. with apple getting involved now it’s only going to mean more pressure on PayPal. They saw the writing on the wall when they tried to make a move for PINS which was idiotic and that’s putting it nicely.
However, acquiring SOFI would be huge for them imo. SOFI, as a stock, is having issues due to being held down because of how it came public and political BS from Biden admin, among other things that have nothing to do fundamentally with how the company is performing. They are crushing it as a company though, delivering huge growth numbers and consistent earnings beats with guidance raises. They Have banking capabilities now which is even more valuable in this rate environment. Having deposits is huge. And as recently stated their deposits are growing exponentially.
This seems like a Match made in heaven to me. PYPL keeps its FCF producing business, but returns to growth with SOFI and its added banking ability. Provides them more of a moat against apple and the other big dogs. I would see this as the equivalent of google acquiring YouTube. Paypal and SOFI would be an absolute monster
Anyone else think this would be a good move for both companies?
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