PayPal Holdings Inc. made an offer to purchase digital pinboard site Pinterest for US$45 billion (A$60 billion), according to individuals familiar with the issue, a pairing that may signal other e-commerce connectors between finance internet and social media businesses. The conversations come as online consumers increasingly buy products they see on social media, frequently by following “influencers” on platforms like Instagram and TikTok.
Purchasing Pinterest would allow PayPal to take a larger share of the e-commerce boom while diversifying its earnings through advertising revenue.
According to one of the sources, PayPal has offered US$70 per share, primarily in stock, for Pinterest. According to the source, the online payments service aims to successfully negotiate and announce a deal by announcing quarterly profits on November 8. The sources emphasized that no agreement was guaranteed and that terms may alter. They begged not to be identified since the situation was private.
Requests for feedback from PayPal and Pinterest were not returned. Bloomberg News first reported the PayPal Pinterest negotiations. PayPal’s bid marks a 26 percent premium over Pinterest’s Tuesday closing price of US$55.58.
PayPal’s stock dropped more than 4% on the announcement, while Pinterest’s stock soared more than 14% to US$63.51.
“The combination would be a big benefit for PayPal and its continuing monetization ambitions on both the merchant and consumer platforms, particularly if Pinterest’s social commerce system is merged with Honey’s AI into PayPal’s destinations app,” Wedbush analysts said in a report. The payments behemoth was one of the biggest beneficiaries of the Covid-19 epidemic, as more individuals utilized its services to purchase online and pay bills rather than going out. Its stock has increased by roughly 36% in the last year, giving it a market capitalization of almost US$320 billion. When Pinterest went public in 2019, it was valued at around US$13 billion. When co-founder Evan Sharp revealed this week that he would step down as CEO creative officer to join LoveFrom, a business run by Jony Ive, the creator of many Apple Inc devices, the company is at a crossroads. Sharp co-founded the online scrapbooking and image system with Ben Silbermann, the industry’s chief executive, and Paul Sciarra, who departed in 2012.
In recent years, PayPal has sought to expand its e-commerce operations through acquisitions. In May, it purchased Happy Returns, a supplier of return services.
