What’s Going On Here?News broke this week that PayPal is thinking about buying social media platform Pinterest, along with a tasteful throw cushion that’ll really make its bedroom pop. What Does This Mean?PayPal has been trying to broaden its services recently, in a bid to keep up with trends toward both ecommerce and shoppable social media content. That’s led it to Pinterest, which the payments company reportedly wants to buy for $45 billion – 26% more than it was worth before the news dropped. That would make it the biggest tech deal of the year, and PayPal’s biggest purchase to date. And why not: PayPal’s share price has more than doubled since the start of 2020, meaning the company’s in a prime position to offer up its stock, rather than cash, as payment. Why Should I Care?The bigger picture: Is it a bird? Is it a plane?
Pinterest’s 380 million monthly active users can already buy products on the platform via payment platforms like Shopify. But if PayPal makes the deal, it’d be able to process and collect fees on all those orders itself. That’d bring PayPal one step closer to its goal of becoming a "super app" for shopping and finance – the American equivalent of China’s Alipay or WeChat.
For markets: Good for the goose, not the gander.
PayPal’s investors weren’t optimistic: they sent the company’s stock down 7% after the news broke. That could be because they’re nervous that the venture will distract from more important matters, or that PayPal will get tied up with the time-consuming and expensive exercise of content regulation. But for Pinterest, the deal might’ve come at just the right time: the company’s active user base has slumped post-lockdown, and its co-founder – who has overseen its growth since 2011 – announced his departure last week. Investors, then, might see this as just what the platform needs, which could be why they initially sent its shares up 13%. | 
