PayPal Exploring Pinterest Acquisition

PayPal Reportedly Considering Pinterest Acquisition

PayPal is allegedly investigating the possibility of acquiring Pinterest, a move that would represent a significant transaction within the technology sector, as reported by Bloomberg.

Initial Discussions

The publication indicates that PayPal, headquartered in San Jose, California, has “recently” initiated contact with Pinterest regarding a potential buyout agreement.

According to a source who requested anonymity, PayPal might offer approximately $70 per share, resulting in a valuation of around $39 billion for Pinterest.

Company Responses

Pinterest has not issued a statement commenting on the report. As of the time of reporting, PayPal has not responded to requests for clarification.

Market Reaction

Following the news, Pinterest’s stock experienced a substantial increase, rising approximately 12% to trade just above $62 by Wednesday afternoon.

Despite this surge, the current price remains below its 52-week high of $89.90.

Valuation Context

The speculated purchase price aligns with Pinterest’s existing market capitalization of $40 billion.

For comparison, PayPal currently holds a market capitalization of $308 billion.

Recent Acquisitions by PayPal

PayPal recently announced the acquisition of Paidy, a Japanese buy now, pay later (BNPL) platform, for roughly $2.7 billion (300 billion yen), primarily funded through cash reserves, to strengthen its operations in Japan.

In November 2019, PayPal revealed plans to acquire Honey Science Corporation, the developers of a popular deal-finding browser extension and mobile app, for $4 billion.

Strategic Rationale

The potential acquisition of Pinterest appears strategically sound upon closer examination.

Pinterest's E-commerce Focus

Over the past 18 months, Pinterest has actively worked to evolve into a robust e-commerce platform, introducing several new functionalities.

In April 2020, the company launched a new shopping experience, enabling Pinterest users to browse real-time inventory through dedicated “Shop” tabs on Search and Pinterest boards.

Improvements were also made to visual search capabilities, increasing the number of products available for direct purchase from Pins.

Advertising and Brand Initiatives

Earlier this month, Pinterest announced the rollout of new features designed to help advertisers and brands effectively promote their products to users on the platform.

This launch represents the company’s latest effort to expand online shopping and advertising revenue.

Leadership Transition

On October 14, Pinterest announced the departure of co-founder Evan Sharp from his full-time role as chief design & creative officer.

Sharp is joining Jony Ive at his new creative collective, LoveFrom, and will transition into an advisory role with Pinterest, focusing on strategy, product development, design, branding, and company culture.

He will also remain a member of Pinterest’s board of directors.