This year, Square bought Tidal, the music streaming service, for nearly $300 million and Afterpay, a company offering installment payment services for online shoppers, for $29 billion. PayPal and Square are both flush with capital and eager to make bold deals. Square, a digital payments company led by Jack Dorsey, who is also Twitter’s chief executive, has also grown over the past two years as the pandemic helped propel a shift away from using cash. Stripe, a start-up that offers payment services to businesses, has gained ground in recent years, reaching a private valuation of $95 billion. “The concept is really owning an audience versus renting,” she said.īut Andrew Jeffrey, an analyst with Truist Financial, called the potential deal “an act of near desperation” that made “zero sense.” He said PayPal was struggling amid increased competition in its core business of facilitating digital payments. Revenue increased nearly 50 percent in 2020 to $1.7 billion as the company’s user growth rose, fueled by people spending more time online in the pandemic.Įmily Anderson, a managing director at Union Square Advisors, an advisory firm not involved in the talks, said a deal with Pinterest could allow PayPal to gain more customers and lock them in, without having to lure them with advertising or partnerships. Pinterest went public in 2019, and over the last year its share price has risen 26 percent. The company has said it has about 454 million users. It caught on quickly, with people flocking to it to “pin” images on home décor, weddings, travel destinations and many other topics. Pinterest was founded in 2009 by the entrepreneurs Ben Silbermann, Evan Sharp and Paul Sciarra. “It means that we’re thinking about things and where things are going and not just where they are today.”Īcquiring Pinterest would be a bold move in that direction, even though the San Francisco-based company largely makes money by selling ads rather than through e-commerce. “Sometimes we buy things that people don’t expect, like Honey, and people question it,” he said. Schulman outlined a “huge road map” for tools related to shopping, including “universal shopping carts.” Future acquisitions, he said, may surprise people. Until recently, PayPal largely bought companies that directly tied into digital payments services, which people use to pay for goods and services online without needing a credit card.īut last month, Dan Schulman, PayPal’s chief executive, told Wall Street analysts that he envisioned the company’s becoming a “super app” that folds in numerous services and functions, like some apps in Asia. The talks were reported earlier by Bloomberg. PayPal’s shares fell nearly 5 percent the company has a market capitalization of $303 billion. Pinterest’s share price surged 13 percent on Wednesday after reports of the deal, bringing the company’s valuation to $40 billion. PayPal did not respond to a request for comment, and a Pinterest spokeswoman declined to comment. Through Pinterest’s app, people can save images to digital pinboards and buy goods directly through what are known as “buyable pins.” In 2019, PayPal agreed to pay $4 billion for the coupon payment platform Honey, which shows people discounts while they shop online. It would also be among the largest deals for PayPal, which was spun off from eBay in 2015 and has snapped up payments companies globally.īuying Pinterest would underline PayPal’s interest in moving further into e-commerce. If completed, the deal would be the largest in the consumer internet industry over the past decade, topping Microsoft’s $26 billion purchase of LinkedIn in 2016 and Salesforce’s $27.7 billion acquisition of Slack last year, according to the data service firm Dealogic. PayPal has offered around $70 a share for Pinterest, the people said, a 25 percent increase from Pinterest’s opening share price on Wednesday. The Silicon Valley digital payments giant has offered to buy Pinterest, the digital pinboard company that enables e-commerce within its app, in a deal valued at about $45 billion, according to people with knowledge of the discussions. Now PayPal is trying to unite one with the other. Digital payments and online shopping go hand in hand.
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