Paysafe

Paysafe is one of those 2021 SPAC IPOs that went from $19 to over $100 to under $1 — and is now slowly clawing back as the actual business turns profitable. It runs two segments: Merchant Solutions (acquiring + gateway for SMB merchants, especially in iGaming and high-risk verticals) and Digital Wallets (Skrill, NETELLER — used heavily by online gamblers in regulated EU and US markets). $1.74 billion in revenue, generating real EBITDA, but still carrying $2.4 billion of legacy debt from the Blackstone/CVC LBO era.

The market hates this stock because the float is heavily owned by the original SPAC sponsors and Blackstone, and every quarterly print invites memories of the 2022 catastrophe. But Paysafe's iGaming acquiring book has natural growth from state-by-state US sports-betting legalization, and the company is on track to reach 1.5x net leverage by 2027.

Blackstone and CVC Capital Partners are the legacy sponsors and remain meaningful holders, slowly distributing over time. No mega-fund 13F whale outside passive indexers. Insider buying from the new CEO Bruce Lowthers in 2024 at $11 signaled a turnaround.

At 7.71 USD the forward P/E of 3.0 on $2.58 consensus forward EPS is extreme. P/B 0.61 and P/S 0.23 reinforce the deep-value setup. EV/EBITDA 6.8 prices in continued deleveraging but no growth. Any iGaming win or further deleveraging milestone could re-rate forward P/E toward the payments-sector median of 12 to 15x.

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Paysafe is a textbook ex-SPAC value play: real business, real cash flow, leveraged balance sheet, hated by every screen. Forward P/E 3.0 with a visible deleveraging path is the kind of asymmetry I look for in a special-situations sleeve. The risk is that iGaming regulation tightens or that Blackstone dumps the float on us; the reward is multiple expansion and possible take-private. I would size 1 to 2 percent, accept the volatility, and let the deleverage compound.