There’s a rumour flying around once more that American Express might be interested in acquiring PayPal. It caused PayPal’s shares to spike almost to $40, the highest it’s been since a few days after their split from eBay.
PayPal President and Chief Executive Officer, Dan Schulman used to be Group President of Enterprise Growth at American Express which lends fuel to the rumours and certainly PayPal would be an attractive addition for the company.
One problem is of course the value of PayPal currently resting around $47.46B. Amex is valued at $57.07B so if it was a straight acquisition they’d have to raise a ton of cash to pay off PayPal’s shareholders. Of course they could be recompensed with joint Amex/PayPal shares but would PayPal investors think that a good deal for PayPal or would he prefer a deal that generated a cash payout?
While it’s all rumour, we know that the likes of Carl Ichan wanted to float PayPal off with their eye to a future merger or acquisition. There’s too much value in PayPal to leave well alone and let it do what it does best. Investors ultimately don’t care how well a company performs for it’s customers, they just want to see how much profit they can pillage for themselves.
3 Responses
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Re: “they just want to see how much profit they can pillage for themselves”
It’s certainly a sad & changed world….!!.
AMEX – probably has the best rewards program for its users and there is a reason for that, they have the highest charges for retailers when processing their card.
We do not accept their cards in our shop and most of our suppliers will not accept payment using AMEX.
This is not a problem in the UK as AMEX is well behind VISA and MC in take up, but if they get hold of Paypal which is pretty much everywhere, it would be too easy to raise revenue by increasing fees.
Lee
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Back in the recession of the early 90’s, we had several company Amex gold cards.
Bear in mind this was a time when a recession actually mean’t just that, and as our company’s turnover dived £10k in a year (whilst most had seen their turnover completely wiped out) Amex cancelled all our cards without notice & when we asked why they, we were told ‘they were loosing vaste amounts of money with firms/indivigals going up the wall and could not take any chances…..
So watch out if you own paypal money from any business loans, and Amex take them over.!!