- Pinterest stock fell as much as 14% on Monday after PayPal said it is not exploring an acquisition of the social media company “at this time.”
- PayPal jumped 6% on the news, but still hasn’t recovered all the losses associated with the rumored merger.
- Reports surfaced last week that PayPal was exploring a more than $US40 ($AU54) billion buyout of Pinterest.
“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,” PayPal said in a statement on Sunday.
Pinterest fell as much as 15% on Monday, erasing all the gains it saw last week from news of deal talks, while PayPal surged as much as 6%. PayPal is still down about 6% from the $US270 ($AU362) level it was trading at right before the rumored acquisition was reported.
A more than $US40 ($AU54) billion merger between the two companies was reportedly under consideration as the payments platform looks to build the kind of super-app that’s popular in emerging markets: one app that encompasses social media, e-commerce, and fintech capabilities, among other functions.
But investors were skeptical of the potential deal, as evidenced by PayPal’s swift 11% decline after reports of the talks. And the steep decline in PayPal’s stock likely hurt the chances for a merger, as the company would have used its stock in a takeover.
A merger between the two companies would have been a short-term lifeline for Pinterest, as a slow-down in digital ad spending due to recent privacy changes to Apple’s iOS system dinged earnings results for Snapchat last week.