A source familiar with the matter told Bloomberg that the companies have discussed a potential price of $70 per share, which would value Pinterest's publicly-traded class A shares at approximately $39 billion and the total company at approximately $45 billion when taking its untraded class B shares into account. The deal would represent a roughly 26% premium to Pinterest’s closing price of $55.58 on Tuesday.
Pinterest went public through an initial public offering back in April 2019, which valued the company at just over $10 billion at the time.
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A representative for Pinterest declined to comment. PayPal did not immediately return FOX Business' requests for comment. As of the time of publication, Pinterest shares are up 12%, while PayPal shares have dropped approximately 5%.
The talks of a potential deal come following a slew of challenges for Pinterest over the last year.
The company announced last week that its chief design & creative officer Evan Sharp would transition into an advisory role at the social media company as he joins Jony Ives' design firm, LoveFrom. Sharp, who designed a built the original Pinterest product and has overseen the company's product strategy and user experience, will continue to serve on its board of directors.
Sharp was named in a March lawsuit filed by a pension fund on behalf of Pinterest shareholders, which accused a group of executives and board directors, of engaging in "systemic illegal discrimination on the basis of race and sex." The lawsuit came after Pinterest reached a $20 million settlement in December 2020 to resolve allegations of gender discrimination and retaliation by its former chief operating officer Francoise Brougher.
In addition, Pinterest reported 454 million monthly active users in July, compared to 478 million monthly active users in April.
PayPal has made a series of acquisitions in recent years, including a $2.2 billion purchase of Swedish financial technology startup iZettle in 2018, a $4 billion purchase of Honey Science Corporation in January 2020 and a $2.7 billion purchase of Japanese buy now, pay later firm Paidy Inc. in September.