PayPal (NASDAQ: PYPL) witnessed a sharp decline of over 15% in pre-market trading, with shares dropping to $52.50, following reports that private equity firm Advent International and payment service provider Stripe have abandoned their acquisition plans.

The selloff comes after a strong rally in the stock, which had surged more than 42% during the quarter on expectations that a deal would be finalized. The two companies had submitted a takeover bid in July at $60.50 per share, valuing PayPal at approximately $53 billion.

According to a Bloomberg report citing anonymous sources, the parties are no longer advancing the transaction. Insiders familiar with the matter indicated that PayPal's management viewed the offer price as too low, deeming it insufficient given the company's long-term growth prospects.

During the pandemic era, PayPal's market capitalization once peaked at over $280 billion, but has since eroded significantly as competition intensified and growth normalized. The report noted that Advent International and Stripe might revisit the acquisition possibility if market conditions shift in the future.

PayPal has not issued a comment on the matter. Stripe stated it would not address market rumors, while Advent International declined to respond.