PayPal Might Purchase Pinterest

Bloomberg reported that PayPal Holdings Inc. is exploring an acquisition of social media company Pinterest Inc., according to people with knowledge of the matter. Bloomberg wrote that PayPal approached Pinterest about a potential deal in private talks. The companies have discussed a potential price of around $70 a share (according to people who were in private talks and who did not want to be identified).

That would value Pinterest at about $45 billion for the entire company, including its Class B shares. A deal at that level would represent about a 26% premium to Pinterest’s Tuesday closing price of $55.58.

It is not unheard of for a big company, who is interested in acquiring another company, to change its mind and back out. It seems to me that most of the time the companies find a way to complete the acquisition. It could go either way, though.

The Guardian reported that Pinterest has more than 478 million active users. It started as a social media company, offering users a way to store and share favorite images. Since then, Pinterest has expanded into visual search and e-commerce. According to The Guardian, Pinterest signed a deal with Shopify, an e-commerce platform for online retailers, to allow its customers to create catalogs on Pinterest.

I think this is why PayPal is considering acquiring Pinterest. PayPal might want to benefit from those user-created catalogs by connecting them to PayPal’s services. The New York Times reported that PayPal faces increasing competition in digital payments. It appears that one of PayPal’s competitors is Stripe, which The New York Times says has gained ground in recent years, hitting a private valuation of $95 billion.

Personally, I don’t like PayPal or Pinterest. I had a really bad experience with PayPal recently, which was so incredibly frustrating and stressful that I decided to stop using PayPal. In my opinion, Pinterest appears to allow users to grab images from anywhere on the internet without crediting the artist or linking to the source of the image. That’s not good at all for the artists who created those works.