PayPal is looking at a potential buyout of social media company Pinterest and is in late-stage talks for the acquisition. But talks are said to be anonymous as the deal discussions are being described as ‘confidential’.
Reports of the ‘potential acquisition’ had shares of Pinterest soaring; the social media company’s stock was halted twice before its closed up more than 12% and PayPal closed at nearly 5%. According to Bloomberg, PayPal has discussed acquiring the company for a potential price of around $70 a share, which would value Pinterest at about $39 billion. Earlier this month, Pinterest announced new features for advertisers and brands to promote their products to users on its side.
Sources told CNBC that competitive pressure from Shopify, an e-commerce platform, pushed PayPal to explore the acquisition. It should be noted that in 2020, Shopify partnered with Affirm to become the exclusive provider or point-of-sale financing for Shop Pay – Shopify’s checkout service; Shopify has heavily invested in blending e-commerce and fintech.
Not to be left behind, PayPal took acquisition of Paidy, a Japanese buy now, pay later (BNPL) service platform, for approximately $2.7 billion mostly in cash, to enhance its business in Japan. In November 2019, PayPal announced plans to acquire Honey Science Corporation, the makers of a deal-finding browser add-on and mobile application for $4 billion. CNBC says PayPal has largely benefitted from the boom in online shopping since the start of the COVID-19 pandemic. And now, a potential acquisition of Pinterest could push the company into social commerce – a growing space that other tech giants are already working on. Social commerce lets companies track clients and purchases within their respective apps, so they can prove the effectiveness of ads to advertisers. It could also allow the companies to receive a cut of each transaction.
If the deal between PayPal and Pinterest is finalized, it would mark the largest in consumer internet sector over the past decade – roughly $70 per share, which would value the deal to about $45 billion.