PayPal is in talks to acquire digital pinboard platform Pinterest for $45 billion (£32.6 billion), according to people familiar with the matter.
The deal is said to be in “late-stage talks”, confidential sources told Bloomberg on Wednesday, with Pinterest reportedly being offered $70 per share, mostly in stock.
If accepted, the deal would be the biggest acquisition of a social media company to date, surpassing Microsoft’s $26.2 billion takeover of LinkedIn in June 2016. PayPal is likely to announce the acquisition by the time it reports quarterly earnings on 8 November, according to one of the sources. However, the deal is still uncertain and its terms could be subject to change.
News of the potential acquisition caused Pinterest shares to surge by 12.8% to $62.68, with CEO Ben Silbermann’s net worth skyrocketing by an estimated $400 million to $3.8 million. PayPal, on the other hand, saw its shares slump by 4.9% to $258.36 at closing. Neither company was immediately available for comment.
Founded in 2019, Pinterest allows users to “pin” posts, such as cooking recipes or decoration ideas, organise them into folders, as well as share them with friends. It makes its money by letting companies advertise their services through promoted posts.
PayPal’s interest in the social media platform stems from the shifting landscape of retail, with customers opting to buy products advertised by “influencers” – popular social media users with high rates of followers and engagement. The trend is seen across other social media platforms: in May 2020, Instagram and Facebook introduced Shops, which allow users to browse and purchase products directly from a business’ Facebook or Instagram profile, while TikTok’s partnership with ecommerce giant Shopify allows retail brands to link their product catalogues to the app.
Pinterest had previously been in talks to be acquired by Microsoft, but the deal fell through in February 2021 after Pinterest expressed a wish to remain independent. This was the second time that Microsoft had attempted to buy a large social media platform, following its failed bid to take over Chinese video-sharing app TikTok.