PayPal is reportedly exploring the acquisition of social media company Pinterest, according to Bloomberg News.
PayPal, the financial technology company based in San Jose, California, recently approached Pinterest about a potential deal that would value Pinterest at roughly $39bn, according to Bloomberg. The price is close to its market value on Wednesday. PayPal has a market cap of $304bn.
The news sent Pinterest’s share price soaring more than 10% and led to trading in the image-sharing and social media service being suspended twice. PayPal’s share price slumped more than 4%. Neither company has commented on the rumors so far.
Pinterest, based in San Francisco, has more than 478 million active users. The 11-year-old service started as a social media company, offering users a way to store and share favorite images. But it has since expanded its services into visual search and e-commerce. Last year, Pinterest signed a deal with Shopify, an e-commerce platform for online retailers, to allow its customers to create catalogues on Pinterest.
PayPal has benefited from the boom in online shopping since the start of the pandemic. In February, the company said its profits had tripled in the fourth quarter, driven by accelerated adoption of digital payments during the pandemic. Last year was its strongest ever annual performance, with PayPal processing a record $936bn in payments.
But the pandemic boom has faded slightly, and the company faces increasing competition from US and international technology companies, including Apple, Facebook and China’s WeChat, which are expanding their financial technology services.
PayPal also owns the mobile payments service Venmo, and has been expanding in the increasingly competitive “buy-now-pay-later” sector with its “Pay in 4” offering.
Last month, PayPal bought Paidy, a Japanese buy-now-pay-later service for $2.7bn.
Facebook, too, has been challenging Pinterest with its Instagram service, where it is increasingly pushing retail. Instagram lets users shop through regular Instagram posts and other features, and last summer began testing a dedicated “shop” tab on its home screen.
Pinterest co-founder Evan Sharp, who also served as the chief design and creative officer, resigned earlier this month. Sharp is joining Apple design guru Jony Ive’s new creative collective LoveForm, but will retain an advisory role with Pinterest and continue to serve on the company’s board of directors.