PayPal ended merger speculation on Sunday and said it was no longer interested in buying social media site Pinterest—bringing to an end one of the shortest and most intense merger flirtations to emerge in recent tech history.
News circulated last week that the San Jose-based online payment service PayPal had approached Pinterest and offered to take the company off the market at $70 a share—a price that puts the value of the company at $45 billion. If successful, the deal would have been the biggest social media acquisition ever, surpassing Microsoft’s $26.2 billion LinkedIn purchase.
But PayPal denied such rumors late Sunday in a terse one sentence response: “In response to market rumors regarding a potential acquisition of Pinterest by PayPal, PayPal stated that it is not pursuing an acquisition of Pinterest at this time.”
Shares in both companies ricocheted as the merger story unfolded. Shares in Pinterest shot up by 13% when investors thought PayPal was interested in buying out the scrapbooking platform, but tumbled 12% on Paypal’s statement, erasing all its merger rumor gains. On the other hand, PayPal shares sank by 12% on the day of the news of the potential acquisition and have since risen 6.7% in premarket trades Monday, leaving it 5% below its level before the rumor.
The deal rumors came against a backdrop of a social media stock selloff Thursday, which saw Facebook and Twitter shares drop by more than 5% after Snap announced it had missed its third-quarter revenue expectations due to Apple’s iPhone privacy changes and supply-chain snarls that led its advertisers to ratchet back their spending.
The deal fallout is disappointing to some who thought the union between the two firms would make Pinterest an e-commerce powerhouse and PayPal a superapp closer to China’s all-encompassing WeChat app, which lets users communicate and transact on the same platform. Pinterest currently has 380 million monthly active users who use the app 37 times a month, according to Bloomberg.
Pinterest was an interesting fit in PayPal’s ambitious growth plan, which this year alone has seen it build out services in bill pay; savings accounts; buy now, pay later; crypto transactions; and online shopping.
PayPal—founded by Peter Thiel and Elon Musk in 1998—bought Swedish point-of-sale fintech company iZettle to compete with Square Inc. in 2018. PayPal bought online coupon company Honey in 2019 for $4 billion to grow its consumer database and discount offering, and in September it bought Japanese deferred online payment service Paidy for 300 billion yen ($2.6 billion).
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