A market analyst downgraded PayPal (PYPL) stock, citing a price rally driven by takeover rumors instead of business fundamentals. The analyst identified a selling opportunity as intense competition continues to challenge company growth.
Reports of a takeover offer from Stripe and Advent International recently buoyed PayPal's share price. The company's board reportedly rejected the offer for being too low.
M&A activity now serves as the primary driver for the stock. The analyst believes the current share price already factors in a potential takeover premium.