- GeneralM&A
- October 25, 2021
- 5 minutes read
Markets: PayPal Fends Off Pinterest Acquisition Rumors
Fintech giant PayPal (NASDAQ: PYPL) has pushed back against rumors that it’s interested in buying social media platform Pinterest (NYSE:…
Fintech giant PayPal (NASDAQ: PYPL) has pushed back against rumors that it’s interested in buying social media platform Pinterest (NYSE: PINS). The company posted an update on its website stating that “it is not pursuing an acquisition of Pinterest at this time”, cooling off the rumors that sent Pinterest’s stock soaring last week.
- Last week, reports emerged of PayPal exploring acquiring Pinterest for around $45bn. The rumors sent Pinterest’s shares up 12% on the day of emergence as investors anticipated a possible deal. However, PayPal has quelled the anticipation with a formal statement, sending Pinterest’s shares down 13% on Monday.
- PayPal, a fintech company, buying Pinterest, a social media company, is not a synergy that seems straightforward, but there’s a catch to it. Pinterest is much interested in online shopping with the way its platform is designed, and PayPal seems to be after that. It reminisced of when the fintech giant bought shopping toolbar Honey last year for $4bn.
- When the rumors began swirling, Pinterest shares rose, but PayPal shares dropped, signaling that the fintech company’s shareholders weren’t pleased with it. PayPal stock closed down 5% last week Wednesday, the day rumors emerged.
- At $45bn, Pinterest would have been PayPal’s biggest acquisition since inception by a large margin. In comparison, the company’s biggest acquisition to date is the $4bn it paid for Honey, a popular online coupon toolbar.
- Historically, PayPal has made many strategic acquisitions to broaden its business. This September, it agreed to buy Japanese “buy now, pay later” startup Paidy for $2.7bn. Perhaps the company actually explored acquiring Pinterest but didn’t see it fit to proceed “at this time.”
PayPal stock rose 4% during trading on Monday. It has a current market cap of $294bn.
