That led to an 18% plunge in the stock the day after the report, and it's understandable that the market didn't like the user decline. The company itself explained, "Since mid-March, however, we believe engagement on Pinterest was disproportionately lower as people began spending more time socializing with friends outside their homes, eating in restaurants, and generally participating in activities that are not our core use cases." Domestic MAUs declined from 98 million in the first quarter to 91 million in the second. Once the reopening began, however, people who had been active on Pinterest returned to more normal social routines, abandoning the app. Pinterest is a great tool if you're looking for new recipes, arts-and-crafts ideas, or creative ways to occupy your kids, and the pandemic era called for plenty of those types of use cases. Increased at-home time and the boredom of the lockdown era sparked a wave of interest in the digital bulletin board. There's no question that Pinterest was a major beneficiary of the pandemic. The stock stumbled after its second-quarter earnings report in July as domestic monthly active users surprisingly fell. That means that Pinterest would be selling itself on weakness, rather than strength. In fact, it's 22% below the peak it hit in August. While that buyout price may sound good compared to the social media stock's recent trading levels, it's considerably lower than where the stock was trading earlier this year. In fact, it's odd that such a promising growth stock would entertain an acquisition offer, especially one as low as $70 a share. Even better, the product-driven nature of Pinterest means that users often want to see ads. The platform is also just beginning to monetize itself as it attracts large advertisers and builds out its ad business in international markets. Pinterest is a unique property in social media, a high-growth industry with only a handful of major players. It's easy to see why the image-based discovery engine is getting so much attention from big tech. Microsoft reportedly considered acquiring Pinterest for $51 billion earlier this year, and that's more than the $45 billion PayPal would shell out. This isn't the first time Pinterest has been pursued by a tech giant. PayPal's purported offer price, according to the story first reported in Bloomberg, represented a 26% premium to where it closed on Tuesday. Naturally, the stock reacted positively to the news, as Pinterest shares had closed Tuesday's trading below $56 a share. Pinterest ( PINS 1.43%) shares popped Wednesday on news that the company is in talks with fintech giant PayPal ( PYPL -0.38%) to be acquired for $70 a share.
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