PayPal is asking its investors to reject an unsolicited offer by TRC Capital for 2 million of its shares.
The so-called “mini-tender” offer — revealed in a Friday (Feb. 24) news release — represents “significantly less than one percent” of PayPal’s common stock.
“PayPal recommends that stockholders do not tender their shares in response to TRC’s offer because the offer is below the current market price of PayPal’s shares and is subject to numerous conditions, including TRC Capital Corporation obtaining financing for the offer,” the news release said.
Their release adds that there “is no guarantee the conditions of the offer will be satisfied.”
PayPal also says Toronto-based TRC has made similar unsolicited mini-tender offers for shares in a number of other companies. In fact, PayPal got another one in 2015, PYMNTS reported.
As the Financial Times wrote in 2021, few investors “have shown the same constancy” as Lorne Albaum, TRC’s CEO, sole employee and only investor, specializing in mini-tenders, which involve attempts to purchase stock in amounts small enough to get around legal loopholes.
Albaum, that article said, maintains that he has no intention of duping investors, arguing that mini-tenders give odd-lots holders a chance to sell without incurring brokerage fees.
The news came almost one year after another unsolicited mini-tender offer for PayPal shares, this one by Tutanota. As PYMNTS wrote at the time, PayPal advised its shareholders to reject that offer — for 360,000 shares — as well.
PYMNTS noted more recently that earnings from PayPal and other payments companies underscore what’s happening in the world of buy now, pay later (BNPL).
Research by PYMNTS shows that the opportunity is substantial for BNPL providers, as just 2.8% of online retail purchases completed with BNPL as of Q4, with BNPL’s presence within retail spending overall still embryonic, at about 1.2%.
And while the percentage share is unchanged between the third and fourth quarters, as we’ve found, as retail spending grows, the read-across is that BNPL volumes grow with it.
For PayPal, BNPL growth has been in the triple digits. As PYMNTS reported, CEO Dan Schulman said the payment method “is driving significant lifts in checkout and incremental TPV [total payments volume].”
Since it launched BNPL three years ago, PayPal has extended 200 million loans to more than 30 million consumers and counts 300,000 merchants among its BNPL roster.
The company’s BNPL tally within its TPV stands at $20 billion through the last year, a 160% increase year over year, and as the transaction count rose by more than 200%.
Later in the company’s recent earnings call, management said that for the quarter, BNPL TPV grew 102% to $7 billion.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More