PayPal has decided not to pursue the acquisition of Pinterest, the payments company said late Sunday. The news has turned the markets upside down, a complete reversal of their $45 billion acquisition announcement last week.
The company shares rose 6.2 percent to $255.20 in premarket trading on Monday. Meanwhile, Pinterest shares fell about 10 percent to $52.50.
PayPal announced on October 20 that they were considering buying digital board site Pinterest for $45 billion. This move aimed at bolstering the links between financial technology and social media in e-commerce. PayPal would have been able to capture more e-commerce growth, since increasing numbers of customers buy items after seeing them on social media, often following “influencers” on platforms such as Instagram, TikTok, and even Pinterest.
It would have been the largest acquisition of a social media company, surpassing Microsoft $26.2 billion purchase of LinkedIn in 2016.
PayPal reportedly offered $70 per share at that time, mostly in stock. The sources cautioned however that there was no guarantee of a deal and terms could change.
That day, the company shares closed that day at $258.36, down 4.9 percent. Meanwhile, Pinterest shares shot up by 12.8 percent to $62.68.
PayPal made a few buyouts this year.
PayPal, one of the biggest winners of the pandemic, has made a few buyouts this year, including its $2.7 billion acquisition of Japanese credit-buying company (BNPL) Paidy.
In May, it acquired Happy Returns, a company that helps online shoppers return unwanted goods, for an undisclosed sum to expand its e-commerce capabilities and build on its acquisition of online coupon finder Honey Science for $4 billion in 2019.
PayPal did not provide any additional details in its statement. Neither company responded to requests for comment.
Pinterest went public in 2019 with a valuation of about $13 billion. The site also saw a spike in users searching for craft and DIY project ideas since containment measures kept people indoors.