Burry maintained a full Fiserv position, citing stronger profitability and better assets than Global Payments.
- Burry’s hypothetical Fiserv buyout valuation of $100 to $120 implies 100%-140% upside from current levels.
- Burry said deal activity could accelerate Fiserv’s investment case ahead of Tuesday’s earnings.
- He remained cautious on Global Payments and FIS, with his valuation ranges below their share prices.
Michael Burry sees a potential takeout value of $100 to $120 per share for payments processor Fiserv (FISV). He also reaffirmed PayPal (PYPL) as a “Fat Pitch” as reported private-equity interest in rival Global Payments (GPN) puts sector valuations in focus.
Burry Sees Opportunity In Fiserv’s ‘Penalty Box’
Burry’s $100-$120 buyout scenario implies upside in the range of 100%-140% from Fiserv’s current market price. He estimated the range by applying valuation assumptions from a potential Global Payments takeover. “Fiserv is far more profitable, only slightly more costly as an acquisition target, and has better assets, relative to Global Payments,” he said in his latest Substack post.
He argued that the stock’s struggles partly reflect a loss of investor trust. “Fiserv has been in the penalty box due to a prior management’s overly enthusiastic growth targets and poorly disclosed benefits from Argentine hyperinflation. This credibility gap is not easily restored on Wall Street, even with new management,” he said.
Burry maintained a full position and said fresh deal activity could bring forward the potential payoff. “Altogether, I find this circumstance an opportunity,” he said. “Remember, insiders have been significant buyers at these low prices.”
The buyout comparison assumes a new owner can change strategy, cut costs, and redirect cash flows. For ordinary shareholders, Burry said Fiserv still traded at about 1.6 times his IV15 benchmark, which is the price at which he expects 15% annualized returns over 15 years.
Fiserv reports third-quarter results on Tuesday.
Burry Questions Value Behind Global Payments’ Buyout Rally
Global Payments shares jumped as much as 18% Friday after reports that Clayton Dubilier & Rice was pursuing a buyout alongside GTCR, its largest shareholder. GTCR gained 15% of Global Payments through its Worldpay acquisition, completed in January at a $24.25 billion enterprise valuation. Global Payments also sold its Issuer Solutions business to Fidelity National Information Services (FIS).
Burry, however, is skeptical of Global Payments’ acquisition strategy and heavily adjusted earnings. “My view, from the point of view of a minority shareholder, has been that Global Payments had little value as a serial acquirer doomed to continue buying companies at a poor rate of return,” he said.
Even assuming better capital allocation, his entry-price range for a control buyer seeking 15% annualized returns was $45 to $60, which is about 38%-54% below current levels. At that market price, he estimated a control buyer could earn 10%. His $18-$26 comparison for FIS was about 33%-53% below last closing price.
Still, he saw a potential catalyst for rivals. “Nevertheless, a buyout of Global Payments should validate the value of the other legacy payment networks. Perhaps even put them in play,” he said.
Burry Stands By His PayPal ‘Fat Pitch’
Burry remains bullish on PayPal, though he said its business isn’t an easy comparison to Global Payments.
“I have it today trading at about 0.80x IV15, and it is a Fat Pitch here in the $50s,” he said. He called his position small to normal in size. His bullish stance predates the latest deal speculation. In July, he challenged Stripe and Advent’s $60.50-per-share offer, arguing that a buyer taking control of PayPal should pay more.
“$60.50 is just too low. I am not selling, and I believe it is only an opening bid,” he said at the time. Stripe and Advent reportedly abandoned their pursuit in August.
Outside payments, Burry added to Sprouts Farmers Market (SFM) call options expiring in 2028 and JD.com (JD) calls expiring in 2029. He also bought more BYD (BYDFF), calling the automaker a mid-sized position and JD as a large holding.
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