Kim Bolton discusses Pinterest
PayPal Holdings Inc. said it isn’t pursuing an acquisition of Pinterest Inc., ending days of speculation over a potential US$45 billion deal.
San Jose, California-based PayPal had approached Pinterest about a potential deal, Bloomberg News reported last week. The companies discussed a potential price of around US$70 a share, people with knowledge of the matter said, a price that would have valued Pinterest at about US$45 billion.
“In response to market rumors regarding a potential acquisition of Pinterest by PayPal, PayPal stated that it is not pursuing an acquisition of Pinterest at this time,” the company said in a one-sentence statement Monday.
PayPal shares rose as much as 6 per cent in U.S. premarket trading, while Pinterest dropped as much as 10 per cent.
An acquisition of Pinterest, a visual search and scrapbooking platform, would have boosted PayPal’s ambitions to become the next global super app. The company was founded in 1998 by a group that included Peter Thiel and Elon Musk to help consumers pay for things online at a time when many were still relying on paper checks or cash to conduct e-commerce.
Pinterest’s shares jumped 13 per cent on Wednesday after Bloomberg News reported the talks between the two firms. The stock has since pared most of those gains and closed near US$58 on Friday. PayPal sank nearly 12 per cent over the previous three trading days.
Analysts questioned the logic of the deal after the initial reports.
“We are perplexed by this potential transaction, and see little or no strategic rationale,” Andrew Jeffrey, an analyst with Truist Securities said. “We see such a move as an act of near desperation.”
A deal to buy Pinterest would have given the payments firm, which last year paid US$4 billion for couponing and price-comparison app Honey Science, more data about the products consumers are buying and the ability to potentially advertise or offer discounts based on that data.