On Monday PayPal said that is not pursuing an acquisition of Pinterest at this time. This comes after several media last week reported on its talks to buy the digital pinboard site for as much as $45 billion.
According to Reuters, the latest development is a blow for Pinterest, which is currently grappling with the twin challenges of losing its co-founder Evan Sharp and a slowdown in user growth that has hampered its future prospects.
Related: Payments Giant PayPal In Talks To Buy Pinterest For $35B
Aided by a boost in digital payments during the COVID-19 pandemic, PayPal’s shares had risen over 35% in the past 12 months, giving it a market capitalization of nearly $320 billion, prior to the reports on its talks with Pinterest.
“An acquisition of Pinterest would introduce significant integration risk, notably in terms of culture and execution as running a platform primarily focused on driving user engagement and advertising would require PayPal to use muscles it isn’t accustomed to using,” said Tien-tsin Huang, a payments analyst at JP Morgan, in a note to clients.
Per Reuters, the Pinterest deal would have been the biggest acquisition of a social media company at the reported price, far surpassing Microsoft Corp’s $26.2 billion purchase of LinkedIn in 2016.
It would have also allowed PayPal capture more e-commerce growth, as more shoppers increasingly buy items they see on social media, often following “influencers” on platforms such as Instagram, TikTok and even Pinterest.
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