PayPal is asking its investors to turn down TRC Capital’s offer to buy 2 million of its shares without being asked.
A news release on Friday (Feb. 24) said that the so-called “mini-tender” offer is for “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 that TRC, which is based in Toronto, has made similar offers to buy shares in a number of other companies without being asked. PayPal got a second one in 2015.
The Financial Times wrote in 2021 that few investors “have shown the same consistency” as Lorne Albaum, TRC’s CEO, sole employee, and only investor. Lorne specializes in mini-tenders, which are attempts to buy stock in small enough amounts to get around legal loopholes.
The article said that Albaum says he doesn’t want to trick investors and that mini-tenders give people who own odd-lots a chance to sell without having to pay brokerage fees.
The news came almost a year after another company, Tutanota, made an unsolicited mini-tender offer for PayPal shares. PayPal told its shareholders to turn down that offer as well, which was for 360,000 shares.
More recently, the earnings of PayPal and other payment companies show what’s going on in the world of “buy now, pay later” (BNPL).
Research from shows that there is a big opportunity for BNPL providers. As of Q4, only 2.8% of online retail purchases were made with BNPL, and BNPL’s presence in retail spending as a whole is still in its early stages, at 1.2%.
Even though the percentage share stays the same from the third to the fourth quarter, we’ve found that as retail spending goes up, BNPL volumes go up, too.
PayPal’s BNPL has grown by more than 100 percent. CEO Dan Schulman told that the payment method “is driving significant increases in checkout and incremental TPV” (total payments volume).
Since it started BNPL three years ago, PayPal has given 200 million loans to more than 30 million consumers and 300,000 merchants.
In the last year, the company’s BNPL in its TPV reached $20 billion. This is a 160% increase from the year before, and the number of transactions rose by more than 200%.
In the company’s most recent earnings call, management said that BNPL TPV grew by 102% to $7 billion for the quarter.
