- PayPal Holdings Inc. is exploring a $45 billion acquisition of social media company Pinterest Inc.
- Its shares closed up 13% at $62.68, giving the company a market valuation of $40 billion.
- PayPal snapped up competitors and moved into new markets.
PayPal Holdings Inc. is exploring a $45 billion acquisition of social media company Pinterest Inc., in what could be the biggest technology deal of the year and move the payments company closer to its ambitions of becoming a “super app.” as reported by Bloomberg.
PayPal approaches Pinterest
The company is based in San Jose, California. PayPal approached Pinterest about a possible arrangement, according to people familiar with the situation who asked not to be identified because the specifics are confidential.
According to the persons, the firms have discussed a price of roughly $70 per share.
Pinterest’s entire firm, including its Class B shares, would be valued at almost $45 billion, representing a 26% premium to the company’s Tuesday closing price.
PayPal’s stock dropped 4.9 per cent on Wednesday, putting the company at $304 billion.
The interest from PayPal comes at a difficult time for Pinterest.
Stocks drop-in July
Pinterest went public in 2019, pricing the firm at slightly over $10 billion in an initial public offering.
Pinterest restricted ads containing weight-loss images and language earlier this year to prevent content that could encourage bad eating habits; in the past, the firm has had to take steps to combat the spread of vaccine misinformation.
Pinterest is similarly adjusting to a post-pandemic drop in traffic.
In July, the company’s stock plunged after it announced fewer monthly active users than experts had projected, a critical indicator for social media companies.
PayPal’s increasing acquisitions
“Not all analysts viewed the potential deal so favourably.“
“We see such a move as an act of near desperation,” wrote Truist Financial Corp.’s Andrew Jeffrey, citing competition from other companies’ “buy buttons” and the tie-up between Square and Afterpay as threats to PayPal’s business.
PayPal’s appetite for acquisitions has been increasing in the past few years as it snapped up competitors and moved into new markets.
It then agreed to buy Honey, gaining access to valuable data on consumer buying habits, and in September agreed to acquire Japanese startup Paidy Inc. for 300 billion yen ($2.6 billion) to deepen its push into “buy now, pay later” offerings.
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Source: Bloomberg
