PayPal Sinks 15% as Stripe and Advent Abandon $50B Buyout, Affirm Soars 13% on ‘Most Profitable Quarter Ever’
A collapsed $50 billion buyout sent shockwaves through the buy-now-pay-later sector Friday morning, splitting two of digital payments' biggest names into opposite directions while the broader financials market barely flinched.
Two of the biggest names in digital payments are ripping in opposite directions Friday morning, with the buy-now-pay-later cluster trading on unrelated single-name catalysts rather than a common thread. The broader financials sector is barely moving, which reinforces that this is a name-specific event and not a sector rotation.
PayPal Holdings (NASDAQ:PYPL | PYPL Price Prediction) stock is down 15% to $52.45 in early Friday trading after Bloomberg reported that Stripe and Advent International walked away from an acquisition of PayPal that had been valued at more than $50 billion. Meanwhile, Affirm Holdings (NASDAQ:AFRM) stock is up 13% to $87.56, a mirror-image move as investors reassess a competitive landscape that briefly looked like it might feature a Stripe-owned PayPal.
Across the rest of the cluster, Klarna (NYSE:KLAR) stock is up 5% to $14.65 and Sezzle (NASDAQ:SEZL) stock is up 2% to $128.70, while the Financial Select Sector SPDR ETF (NYSEARCA:XLF) sits at $57.90 and is practically unchanged. The dispersion inside the buy-now-pay-later group tells you the cluster isn’t trading as a bloc.
Deal Collapse Erases the Bid Premium
Bloomberg first reported Stripe’s interest in PayPal in February, and The Wall Street Journal reported in August that PayPal had found the initial bid insufficient and that the two sides were negotiating a higher price. Stripe and Advent are both privately held, so the withdrawal removes an obvious buyer without introducing any new public competitor. The takeover overhang that had lifted PayPal stock for months is gone.
PayPal stock had risen more than 40% this quarter on a combination of a second-quarter earnings beat and takeover speculation, and one of those two supports has now disappeared. PayPal stock carries a market cap of roughly $52.59 billion, close to the offer that was just withdrawn, which is what makes today’s air pocket feel especially sharp. The underlying business hasn’t changed: PayPal’s Q2 2026 report showed non-GAAP EPS of $1.38 versus $1.2776 expected, revenue of $8.68 billion, and total payment volume of $486.45 billion, up 10%.
Affirm Rides Fundamentals and a Fresh Shopify Deal
Affirm reported fiscal fourth quarter 2026 results after Thursday’s close, covering the quarter ended June 30, 2026. CEO Max Levchin described the period as “our most profitable quarter ever, even without the tax allowance release” and stated that “the company is thriving and the core business is firing on all business.” Affirm also promoted Michael Linford to president, a signal that management sees the growth runway extending well beyond the current quarter.
Additionally, Affirm and Shopify (NASDAQ:SHOP) announced Thursday afternoon the launch of Shop Pay Installments in Australia, powered exclusively by Affirm, marking Affirm’s return to the Australian market. Shopify is a payments and commerce heavyweight, and exclusive distribution through Shop Pay is the kind of channel that peer BNPL names would struggle to replicate. The vanishing threat of a Stripe-controlled PayPal only sharpens Affirm’s competitive setup heading into the holiday season.
BNPL Cluster Isn’t Trading as a Bloc
Klarna stock and Sezzle stock are both green, but neither is riding the Affirm move dollar-for-dollar. Klarna is drifting higher on relief that the biggest checkout-brand consolidation scenario is off the table for now, while Sezzle is barely participating despite operating in the same lane. Same category, different price action.
The Financial Select Sector SPDR ETF sitting essentially unmoved is the tell that this isn’t a sector event. Payment fintechs live inside financials for index purposes, but XLF’s flat move confirms banks, insurers, and diversified financials aren’t reacting. Investors sizing their exposure around today’s headlines can treat these moves as idiosyncratic rather than thematic.
What to Watch
Traders can watch for whether PayPal stock finds a floor near its pre-speculation level from earlier in the quarter, since that reference frames how much of the recent rally was fundamentals versus takeover premium. Shareholders may want to keep an eye on whether Affirm’s Shopify Australia rollout produces early volume disclosures over the next few quarters.
Position sizing matters more than usual on days like this. Investors chasing Affirm stock at a 13% higher price should size their exposure to survive a mean-revert session, and anyone bottom-fishing PayPal stock should scale in rather than commit full size into a name that just lost its most obvious near-term catalyst.
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David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.
His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.
With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
