Shares of social media and image sharing platform Pinterest soared following reports that payments giant PayPal Holdings is looking to purchase the platform in a deal that could raise Pinterest’s value to about $39 billion. The report was made by Bloomberg on Wednesday and according to the report which cited “people that know about the matter”, the companies are discussing a likely price of $70 per Pinterest share.
Following these reports, Pinterest shares rose. The company’s stock was however halted twice before gaining over 10 percent this morning. According to the news, shares of PayPal suffered a dip of over 3 percent.
Created by Ben Sibermann, Evan Sharp and Paul Sciarra, Pinterest is an image sharing site as well as a social media platform that is designed to enable people to share their ideas, interests and information using majorly images and on a lesser scale, GIFs and videos. As of March this year, the platform has more than 478 million global monthly active users and is operated by Pinterest Inc. The company is based in San Francisco, USA.
In April 2019, Pinterest went public and was valued at a little over 10 billion. PayPal is reportedly discussing acquiring Pinterest for $70 a share. If this is agreed upon, Pinterest could be valued at $39 billion at the end of the acquisition.
PayPal is one of the biggest payments brands in the world. The American multinational fintech company operates its business in several countries. The company is one of the many that benefitted from the boom in online shopping and mode of payment, following the coronavirus pandemic that left people locked up in their houses. When/if the acquisition pulls through, it would signal the payments company’s launch into the social commerce space which is one of those booming areas that companies are starting to leverage. Who knows what plans PayPal has or could have for Pinterest.
Social commerce is a booming sector. It gives companies the ability to track clicks and purposes within their apps, allowing them to track the effectiveness of ads. An example of this is what Facebook is doing with Instagram by making it a place where people can shop. Companies have a lot to gain from social commerce and this is why they are delving into it.
Pinterest stock closed at $55.58 per share on Tuesday.
