PayPal is not looking to buy Pinterest at the moment
Payment gateway PayPal was on its way to purchase popular image sharing and social media service Pinterest, but later it came to a halt. PayPal on their website says they are “not perusing an acquisition of Pinterest at the time.”
On October 20, 2021, a Pinterest logo was visible on smartphones over US dollar banknotes and 3D printed PayPal logo. The effect also reflected the NASDAQ exchange as both companies saw a rise and fall in share prices due to the acquisition news. Bloomberg first reported the news. On Monday, PayPal shares went 3 per cent up, where Pinterest shares were down by 12 per cent on the Nasdaq exchange, which created a mixed feeling among stockholders and the general public.
A brief statement published by PayPal on October 24, 2021 said, “In response to market rumours regarding a potential acquisition of Pinterest by PayPal, PayPal stated that it is not pursuing an acquisition of Pinterest at this time.” Currently, on NASDAQ, PayPal (PYPL) shares are sold at $232.59, 1.79 per cent lower than the previous day.
Before the denied acquisition, news buffered in social media channels and news sites, stock price halted twice, and at the same time, PayPal ended at nearly 5% degraded stock price.
Previous discussions made for the purchase of Pinterest was $70 a share, totalling up to $45 billion for acquisition. The company prefers Class B shares which put the total price at $39 billion. San Jose, California-based company PayPal has been waiting for quality purchases for quite some time and their interest in Pinterest shined a light for many answers. The rumoured acquisition would’ve been the biggest since the company bought Honey for $4 billion in 2019.
PayPal is undoubtedly one of the most famous names in the digital banking industry as they have integrated services with many eCommerce, banks and other financial activities. Experts say they became motivated by Shopify’s move as they are forcing trail into more aspects of eCommerce. The pandemic boosted PayPal users as customers bought their desired items mostly from home, which generated tons of revenue. What is the best way to use that money? Investing in other business, of course. It would’ve been a bold move by both companies as they are popular in their niche. The buyout would give Pinterest the official button of purchase and selling with PayPal and partially transition it to an eCommerce sector.
Trust Securities analyst Andrew Jeffrey said, “A move to make another online deal, even in social media, just doesn’t make a lot of sense long term.” Meanwhile, Facebook renamed the parent company Meta and created ‘metaverse’ for its virtual reality and augmented reality programs. From this, we understood large IT buyouts that happened previously were somewhat close to the sector to benefit directly. But nowadays, we are seeing a mixed pace among these acquisitions to experiment with another side of the market. These are not small company purchases, so decisions regarding them take a solid amount of time.
Five years ago, Microsoft created a significant milestone yet to be broken. The deal was for $26 billion to buy LinkedIn. That was the largest acquisition of social media, and it would’ve been the highest. Since the news denied lots of hope, the share price of PayPal is still suffering. Though it is a bit low, the company managed to raise its share price 150 per cent from last year, evaluating the company at $280 billion. If decisions change in the future, at Tech News Hub, we’d be sure to update our readers accordingly.