Pinterest soars 19% on reports PayPal is exploring acquisition of social media company for $39 billion

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Pinterest soars 19% on reports PayPal is exploring acquisition of social media company for $39 billion
Pinterest CEO Ben Silbermann. REUTERS/Brendan McDermid

Pinterest stock soared as much as 19% on Wednesday after Bloomberg reported that the social media company was approached by PayPal about a potential merger, citing people with knowledge of the matter.

PayPal is exploring buying Pinterest for $70 per share, or about $39 billion. Shares traded around $55.50 before news of the potential deal. Negotiations are ongoing and may not result in a transaction, sources told Bloomberg.

Shares of PayPal fell as much as 5% following the report, suggesting that investors have little faith in the rationale behind the fintech behemoth acquiring Pinterest. The social media company allows its users to compile "boards" of different images and information that can then be organized and shared with others.

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Pinterest is popular with home decorators, designers, and counts females as an overwhelming majority of its 454 million monthly active userbase.

After an initial surge in growth amid the economic lockdowns and work-from-home trends tied to the COVID-19 pandemic, Pinterest has seen a deceleration in users as the economy begins to reopen.

Despite Wednesday's surge, Pinterest stock is still down 10% year-to-date.

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Pinterest soars 19% on reports PayPal is exploring acquisition of social media company for $39 billion
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