PayPal has entered talks to buy out social media company Pinterest in a deal that could be worth as much as $45billion.
In what is being described as the biggest technological takeover of 2021, PayPal has set its sights on becoming a major player in the shopping and finance world, and it would exceed the $4bn they paid to purchase price-comparison app Honey Science Corp.
PayPal also recently acquired Paidy – a Japanese “buy now, pay later” style company for $2.7bn – and it wants to become a one-stop solution for consumer finance.
As far as Pinterest are concerned, PayPal recently made a proposed bid of $70 a share option to the board, and Pinterest is looking to capitalise on the rise in its share price.
In the past week, shares climbed by more than 13% to $63.31 on the back of the news of takeover talks.
Earlier in the summer, Dan Schulman, PayPal’s president, indicated that a “consumer wallet app” would be rolled out across the US, and there would be a stock trading platform built in.
PayPal has come a long way in the past couple of years, and it has become a trusted source of payment for individuals and businesses. PayPal casino sites have regularly sprouted, including Borgata, Sugarhouse, and 888Casino, and making deposits and withdrawals have become seamless.
Although their shares dropped by nearly 5% in the past week, PayPal continues to make big strides, and now it is thought to be valued at around $304bn.
Currently, PayPal and Pinterest declined to comment on a potential deal that still has a long way to run.
Nevertheless, for PayPal, if they can complete a deal, it would give them a great entry point into the social media world. Instagram and Facebook, for example, have introduced Shops, which allows users to browse and purchase products directly from a businesses’ Facebook or Instagram profile.
PayPal has made it its main aim to boost traffic to the site, and increase user levels to its sprawling platform to 750 million by the end of 2025. The platform has big designs on becoming an indispensable part of people’s lives in much the same way that Facebook or Amazon has done over the past decade.
Pinterest, meanwhile, is on the right trajectory, and since it floated in April 2019, its shares have almost trebled in that time.
The pandemic forced people to change their shopping habits, and talk of a PayPal takeover would be warmly received.
However, such news has been tempered by the announcement of Pinterest co-founder and design chief, Evan Sharp, who will be stepping down from his role amid criticism over Pinterest’s company culture.
Earlier this year, Microsoft approached Pinterest over a deal, but talks collapsed after Pinterest confirms its desire to remain independent. Microsoft had also failed in its efforts to take over the Chinese social app TikTok.
Pinterest has been deepening its push into eCommerce with new shopping tools, and if PayPal can strike a deal, it is one that could be mutually beneficial to both parties.