PayPal’s offer carries a 26% premium over Pinterest’s current share price
PayPal has made a $45 billion offer to acquire Pinterest, according to a report by Reuters.
Pinterest is a digital pin board site. The image sharing and social media platform has been designed to enable users to save and discover new information or “Ideas” as it calls them.
The platform was created in 2009 by Ben Silbermann, Paul Sciarra and Evan Sharp. It currently has 478 million active users monthly, as on March 2021.
Sources close to Reuters said that if the deal goes through, it could enable more talks between financial technology companies and social media platforms in the future. The sources also cautioned that no deal was certain and the terms were liable to change.
Paypal’s shares have risen 36 percent during the pandemic, as more users have used its payment gateway for online shopping. Its valuation is currently at $320 billion.
Pinterest experienced a surge of its own as people flocked to the site for ideas on DIY projects or crafts. The company has warned of the growth slowing down, once the lockdown lifts.
The bet here is to use Pinterest’s digital scrapbook and pin board model to drive sales of products online. Internet shopping is heavily driven by people following “Influencers,” on social media platforms. With Pinterest under its umbrella, Paypal would be able to draw more income through advertising.
Paypal’s offer is a 26 percent premium over Pinterest’s current valuation, which is $55.58 per share. Paypal has offered to buy shares at $70 a piece.
“(The) combination would be a significant positive for PayPal’s ongoing monetization initiatives on both sides of its merchant and consumer platforms, especially if Pinterest’s social commerce platform gets integrated with Honey’s AI into PayPal’s destination app,” Wedbush analysts wrote in a note.Internet Explorer Channel Network