By Sam Boughedda
Investing.com — PayPal Holdings Inc (NASDAQ:PYPL)is exploring a potential acquisition of Pinterest Inc (NYSE:PINS), according to a report by Bloomberg, citing people with knowledge of the matter.
Pinterest shares jumped 12% after the report. PayPal shares fell 3%.
California-based payments giant PayPal recently approached social media firm Pinterest about a possible deal, with the companies discussing a possible price of around $70 per share. That would value Pinterest at $39 billion.
A deal at that price would be a premium on Pinterest's closing price of $55.58 on Tuesday.
Bloomberg said its sources did state that transaction terms could alter, and there is no guarantee of a deal.
Following reports of a potential deal, Andrew Jeffrey, an analyst at Truist, believes a potential deal would make "zero sense" and underlines his concerns about PayPal's organic revenue growth durability. The analyst currently has a $275 price target and Hold rating on PayPal shares.
On the flip side, Baird analyst Colin Sebastian said that a possible combination between the companies could make strategic sense and accelerate their 'super app' ambitions. Sebastian has a $325 price target and Outperform rating on PayPal stock.