Kurt Akers

so... who's buying Paypal? It has the potential of being one of the great distressed value opportunities in fintech history. Down ~85%, still generating $5.5B in FCF, 400M consumer accounts with bank info, checkout buttons on millions of merchant sites, and a peer-to-peer brand in Venmo. They have a lot of desirable assets for Stripe (consumer-facing checkout, bank account details for hundreds of millions of consumers, a brand in Venmo) or Apple (good complement to Apple Pay for ecommerce penetration, they never got social payments going, would get Apple back in BNPL). But in both cases, cultural fit makes them a nonstarter. PayPal is a sprawling legacy fintech with 25k employees and decades of technical debt. Neither Stripe nor Apple would want to absorb that. Apple also might face Big Tech antitrust with this kind of thing. Visa & Mastercard could both afford it and they've been creeping into merchant acquiring and checkout. PayPal’s checkout button placement is enormously valuable real estate for either network. The networks have been trying to move beyond interchange into direct merchant relationships, and PayPal could accelerate that by years. I think they may also be burned out on antitrust... either network acquiring the largest independent online checkout provider would (& should!) face brutal regulatory scrutiny. What about Elon??? Elon cofounded Paypal and always wanted it to be called X, so there is some poetry in it coming back under his fold as X... and per "the most entertaining outcome is the most likely" and it sure would be entertaining! X + PayPal + Venmo could genuinely be the Western super app play that he's always wanted. Markets would go crazy. His bandwidth is spread impossibly thin across Tesla, SpaceX, xAI, X, politics, and replying "concerning" to posts at 3am... but you could have made the case he was spread too thin before he started/acquired the last several companies too... Technical debt at Paypal is a big challenge that he knows. I would never count him out, but I just don't see it. IMO, JP Morgan makes the most sense - they've spent heavily on payments and an acquisition could get them closer to building a consumer super app. $50B would be a huge acquisition, even for them, but they could stomach it, assuming they could get regulatory approval. Venmo gives them a P2P brand they’ve never been able to build, especially among younger consumers. PayPal’s branded checkout button sits on millions of merchant sites, distribution JPM has never cracked at that scale. The BNPL book complements Chase’s card lending business. And Braintree’s enterprise merchant processing, combined with Chase Merchant Services, would create a strong acquiring platform... all things they want. They haven't acquired any major fintech companies (the ones they've done have mostly been duds), but I could see it. I do wonder what regulatory approval would be like here- the OCC, Fed, and FDIC would all need to weigh in... There's a major cultural integration risk, like there would be for anyone acquiring PayPal... I do think any of the other massive banks could be potentials (Bank of America, Citi and Wells, in that order), but I don't see any of them as being as ambitious. Would be ironic for the company that was supposed to eat the banks to get eaten by one! Final thought would be PE... it's still spitting off $5.5B in FCF, and has a bunch of assets you could split off into pieces after cutting costs aggressively. Anyone I missed?