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• Paypal plans to acquire Pinterest for nearly $45 billion
• In a private talk, the two companies discussed a price of around $70 a share for the deal
Fintech firm PayPal Holdings Inc plans to acquire the social media company Pinterest Inc, Bloomberg reported on Wednesday, citing people with knowledge of the matter.
The report said that in a private talk, the companies had discussed a possible price of around $70 a share, which would value Pinterest at about $45 billion.
The deal amount represents a 26% premium to Pinterest’s Tuesday closing price of $55.58.
Pinterest shares surged nearly 19% to $66 a share in New York trading Wednesday, while the shares of PayPal were down about 7%.
Talk timing
The interest in acquiring Pinterest, which went public in April 2019 and raised $10 billion, comes at a complicated time when its co-founder Evan Sharp, who oversaw its design and product teams, is stepping down, and the social media company is dealing with several accusations of discrimination against female workers.
A boom in online shopping during the pandemic has helped PayPal stock jump more than double, giving the company a strong cash flow that it could use for acquisitions.
PayPal weighing on Pinterest
PayPal is focusing on becoming the world’s next “super app,” a one-stop shop for shopping and finance, like China’s Alipay and WeChat, India’s Paytm or Singapore’s Grab.
Earlier, the firm said it would add several new services to revamp its app, including high-yield savings accounts, check-cashing services and stock-investing features and expects to have 750 million active users by the end of 2025, from its 403 million users.
Pinterest, which offers a visual search and scrapbooking platform, benefited in the early stages of the pandemic as advertisers flocked to social media sites to captivate audiences who embraced e-commerce.
The social media company has been introducing new tools to help creators make their “pins” shoppable.
Pinterest shares hit an all-time high in February, but they have since fallen as usage slowed with the easing of COVID-19 restrictions. In July, Pinterest reported monthly active users for the second quarter that missed the average analyst estimate and said it lacks visibility on key engagement drivers in the future.
PayPal’s appetite for acquisitions has increased in the past few years, and purchased the European small-business commerce platform iZettle in 2018, the price-comparison app Honey Science Corp for $4 billion in the next year, to get access to data for consumer buying habits.
In September, the fintech firm agreed to acquire Japanese startup Paidy Inc for 300 billion yen ($2.6 billion) to deepen its push into “buy now, pay later” offerings.
Picture Credit: TechCrunch