The major talking point in the market yesterday was that PayPal and Pinterest were in discussions about a possible merger, causing both to be some of the biggest movers for the day as investors started pricing in the possibility of the occurrence.
The Philly Fed Manufacturing Index is due to be released this afternoon as well as the Unemployment Claims both could cause some movement on the Dow and S&P given the actuals in comparison to the forecast.
- Pinterest Inc (PINS) was up 12.77% due to the Paypal discussions
- PayPal Holdings Inc (PYPL) was down 4.91% due to the Pinterest discussions
- Ford Motor Company (F) was up 4.02% as Credit Suisse indicated a potential upside of 30% to the electrification division.
- Coinbase Global Inc. (COIN) was up 2.97% as it rallied following new all-time highs for Bitcoin.
Stocks to Watch:
Yesterday we saw an extraordinary increase in the price of Pinterest due to the announcement that PayPal is looking at the acquisition of the social media platform, both companies are currently in discussions surrounding a potential merger.
Microsoft attempted to purchase Pinterest last year but failed to conclude due to management pursuits and mainly just for the reason to migrate Amazon Web Services from the platform itself. The major benefit on the table with PayPal’s interest is that there would be a mutually beneficial interest from both parties as PayPal’s technology would be able to be integrated seamlessly into the social media platform.
The only real reason why the merger would fall short would be due to a disagreement with regard to valuation, as the acquisition aligns seamlessly with both parties’ end goals.
From a technical point of view, if profit-taking is due to come into effect over the next couple of days we might see a retracement back down to the 200-day moving average or the most recent support back down to $57 before the continuation of the momentum would take place. The current estimation of acquisition should be around $70-$80 per share if the deal is to go through.