What's going on?

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%.