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Could This Be Shopify's Next Acquisition?

By Rachel Warren and Toby Bordelon – Jan 12, 2022 at 10:23AM

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Two investors discuss.

Shopify (SHOP 3.08%) has made some highly strategic acquisitions over the years to expand its business to what it is today. Could more acquisitions be in store for the e-commerce giant in 2022? In this segment of Backstage Pass, recorded on Dec. 17, contributor Rachel Warren shares her ideal acquisition target for Shopify in 2022 with fellow contributor Toby Bordelon.

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Toby Bordelon: What do we think is going to happen? What do we think is going to happen in 2022? The thought here viewers was, I wanted everyone to think about a deal they think might happen or should happen, even if it's crazy, even if it's unrealistic, and you feel either way, the most likely you think would happen or one that you think would be really fantastic even if it has no chance of happening.

Let's see where people thought here, and in our closing minutes. I'm just going to go around, let me start with Rachel. Rachel, what do you think, what's your deal?

Rachel Warren: Yeah, I definitely chose the crazier imaginative end of the spectrum here. My idea was, what if Shopify acquired Pinterest? Again, I don't see that happening, but this just occurred to me as I was pondering, what do we want to talk about. We know that Pinterest, potentially there were talks that it will be acquired by PayPal earlier in the year that fizzled, and that just didn't happen, and we don't know if that had been official or not.

But the thing with Pinterest is, it already operates in this really specific niche within the e-commerce space because Pinterest essentially is an advertising platform.

As a consumer, you go on, you use it, you create a board for inspiration, and whatever genre you want, you pin images. But brands of all sizes use Pinterest as a means of capturing, and retaining new customers.

You have small businesses to large businesses that will create boards on which they put product pins, as well as shoppable pins, where you as the consumer can go on Pinterest, and actually purchase an item directly through Pinterest.

The interesting thing here, and partly where I got the idea was that, back in May in 2020, Pinterest had announced a partnership with Shopify that enabled merchants to have a quick way to upload catalogs to Pinterest, and turn their products into shoppable pins in just a few clicks without the need to edit code or add development resources.

That's available in countries where Pinterest ads are deployed, which includes many countries in North America, Europe, in Australia, the UK.

Businesses of all sizes have been deploying the Pinterest platform to grow within the e-commerce space. To me, I feel like this is something that could make a lot of sense, and I feel like Shopify's leadership could do a lot to help Pinterest grow its business, but again, I don't really see this happening.

Toby Bordelon: That's fascinating. Yeah, I don't know if it'll happen either, I would see some potential Pinterest issues there. Although, when PayPal was rumored to be acquiring Pinterest, there was that idea that maybe they're just trying to set up a competitor platform to Shopify potentially.

Rachel Warren owns Shopify. Toby Bordelon owns PayPal Holdings and Shopify and has the following options: short January 2022 $42 puts on Pinterest. The Motley Fool owns and recommends PayPal Holdings, Pinterest, and Shopify. The Motley Fool recommends the following options: long January 2022 $75 calls on PayPal Holdings, long January 2023 $1,140 calls on Shopify, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

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