If you haven’t heard the news, PayPal (aka the devil’s payment processing company) is allegedly in late-stage talks to acquire Pinterest. But, the question I’m sure many are asking is: why?
Why does PayPal want to buy Pinterest? Why would Pinterest be entertaining such a low offer at $70 per share which would value the deal at approximately $45b when Microsoft offered a $51b deal in early 2021? It seems a little low unless PayPal is going to offer stock as part of the deal.
It’s no secret that Pinterest is a valuable part of the sales funnel. They also have a very valuable userbase comprised mostly of women. PayPal has also seen increased competition from buy-now-pay-later companies like AfterPay, competition from Shopify and Instagram taking an e-commerce path. Really, PayPal is part of the sales process but has no platform of its own.
If PayPal did acquire Pinterest, undoubtedly it would be a boon for PayPal. It’s a valuable platform, despite reporting a decline in users in July 2021.
The most exciting thing about this deal I want to know is, how is PayPal going to afford this? The contract terms will be interesting if the deal goes through and doesn’t fall apart as the Microsoft one did.
Even more left field, what happens if Microsoft comes back to the table and offers even more money? All I know is, PayPal are going to have to pony up more than $70 per share for this deal to go through.