Traders are seen working on the New York Stock Exchange floor. Spencer Platt/Getty Images
Pinterest stock dropped as high as 14% Monday, after PayPal stated that it does not plan to acquire the social media company.
PayPal's stock price jumped by 6% following the news but has not recovered all losses from the rumored merger.
Last week, reports surfaced that PayPal was considering a purchase of Pinterest worth more than $40 billion.
The rumored merger of Pinterest and PayPal is not in consideration. Both stocks have moved in opposite directions after the news.
"In response to market rumors about a possible acquisition of Pinterest by PayPal," PayPal said in a Sunday statement.
Pinterest lost 15% Monday, erased all gains last week due to news of deal negotiations, while PayPal soared up to 6%. PayPal is still trading at about 6% below the $270 level it traded at before the rumored acquisition.
As the payments platform seeks to create the type of super-app that is popular in emerging markets, the company was said to be considering a merger worth more than $40 billion. This app would include social media, ecommerce and fintech capabilities.
Investors were skeptical about the deal as PayPal's rapid 11% drop after news of the talks showed. The steep drop in PayPal stock prices likely hurt prospects of a merger as PayPal would have used its stock to buy another company.
The merger would have provided a temporary lifeline to Pinterest as there was a slowdown in digital advertising spending following recent privacy changes to Apple’s iOS system.
These privacy changes will likely impact the results of other online advertising platforms such as Facebook, Twitter, or Pinterest.
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