Pinterest shares jump on reports of PayPal merger talks

[NEW YORK] Shares of Pinterest, a platform combining social networking and photo sharing, soared on Wednesday after reports of possible takeover talks by online payment service provider PayPal.

The companies were discussing an acquisition price of US$70 per share, according to Bloomberg, which would value Pinterest about US$44 billion, taking into account the total outstanding shares.

Neither PayPal nor Pinterest responded immediately to requests for comment.

Just after 1800 GMT, Pinterest stock was up nearly 14 per cent to over US$63, while PayPal had lost about five per cent to hover around US$258.

Launched in 2009 with a focus on user creativity, Pinterest went public in April 2019.

It had revenues of US$1.69 billion in 2020, up 48 per cent, and had 454 million monthly active users at the end of June 2021.

But the market had deemed the growth in the number of its users disappointing when it released its second quarter results in July.

Analysts feared Pinterest would not be able to maintain the momentum it gained during the Covid-19 pandemic, which had boosted its traffic.

At the end of July, the site was reporting a seven per cent year-over-year decline in its users in the United States.

Like many social networks, Pinterest is looking to improve the monetisation of its content and traffic.

The group announced Wednesday a series of innovations to expand the site's range of uses, but also facilitate the sale of products by creators on the platform.

Monetization and the use of online payments could thus constitute a junction point between Pinterest and PayPal, a longtime e-commerce player.

As for PayPal, it has more than doubled its market capitalisation thanks to the explosion of online commerce during the pandemic, and now exceeds US$300 billion.

The company is looking to expand through acquisitions.

In early September it announced the purchase of the Japanese specialist in credit purchases online, Paidy, for US$2.7 billion.

AFP