It looks like PayPal is interested in buying Pinterest, rumors suggest the financial technology company is willing to spend a massive $45 billion for the digital pinboard. If completed, it would be the largest consumer internet deal of the past decade and serve the company's interest in moving further into e-commerce.
PayPal is an online payments system that supports online money transfers in many countries and serves as an electronic alternative to traditional paper methods such as checks and money orders. The company operates as a payment processor for online vendors, auction sites, and many other commercial users, for which it charges a fee.
The purchase of Pinterest is in their interest as it comes at a time when there is a surge of internet shoppers buying items they see on social media. Shoppers are increasingly following influencers on platforms such as Instagram and TikTok who promote products to their viewers. Acquiring Pinterest would allow PayPal to capture more of that e-commerce growth and diversify its income through advertising revenue.
The New York Times reports that last month PayPal’s chief executive, Dan Schulman, told Wall Street analysts that he envisioned the company’s platform should include numerous services and functions. Something he referred to as a “Super App” akin to WeChat in China, which allows users to send messages, location sharing, and perform financial transactions.
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Acquiring Pinterest would be a bold move toward that goal.
Schulman outlined a roadmap that included tools related to shopping, including universal shopping carts. Acquiring Pinterest would allow PayPal to enable users to buy pinned products directly from Pinterest, rather than visiting a separate merchant site.
Bloomberg is reporting that PayPal recently approached Pinterest about a potential deal. Sources say the companies have discussed a price of around $70 a share.
Pinterest went public in a 2019 initial public offering valuing the company at just over $10 billion.
That values Pinterest at nearly $45 billion for the entire company, including its Class B shares, and would represent about a 26% premium to Pinterest’s Tuesday closing price.
It would be the biggest acquisition of a social media company, surpassing Microsoft’s $26.2 billion purchase of LinkedIn in 2016.
Sources: Bloomberg, New York Times