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Today's big stories

Payments giant PayPal is thinking about buying social media platform Pinterest
Our analyst has looked into whether you should buy into the world’s first bitcoin ETF – Read Now
Three of America’s biggest airlines reported better-than-expected earnings, but they’re not out of the woods yet

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What’s Going On Here?

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%.

You might also like: How to work out if Pinterest’s really worth $45 billion.

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Analyst Take

Should You Buy Into The World’s First Bitcoin ETF?

Stéphane Renevier, Analyst

What’s Going On Here?

The first-ever bitcoin ETF is finally available to trade under the ticker “BITO”, and it closed its opening day with a bang: up 5%, with record volume and high retail participation.

But if you’re thinking about buying into BITO, there are a few things you should know first.

The most obvious is that BITO doesn’t invest in bitcoin directly, but in futures: derivatives contracts that bet on where bitcoin’s price will be at a designated point in the future.

That’s important: it impacts the fees you’ll pay, the regulatory waters you’re wading into, and the operational requirements the ETF’s managers will have to meet.

So that’s today’s Insight: what sets a futures-linked ETF apart, and whether BITO is ultimately worth putting your money into.

Read or listen to the Insight here