Pinterest Stalked by Activist Investor Elliott Management

Pinterest stock jumped to 20.25 +2.69 or +15.3% after the WSJ reported that activist Elliott Management Corp. has built a stake of over 9% in the company to become the biggest investor in PINS. The once hot social-media company that Paypal had eyes on much higher, though $PYPL backed out after the payments company’s shareholders balked. Now like many social media companies it has a decline in users and faces other challenges from a collapsing stock market and economy.

Elliott has been in discussions with Pinterest over the past several weeks but the WSJ said it couldn’t be learned what they have been discussing. Elliott has more than $50 billion under management as of the end of last year, also has a private-equity arm, Evergreen Coast Capital.

Pinterest has become unstable itself. Several Pinterest executives have departed in recent months, including its head of global business operations and its investor-relations chief. In June, one of three Pinterest co-founders Ben Silbermann stepped down as chief executive and became executive chairman. PINS named Bill Ready, who had been president of commerce at Alphabet Inc.’s Google since 2020, as his replacement.

Mr. Silbermann has a roughly 37% voting stake in the company, according to its latest proxy filing from April. Clearly, he is the key to force changes.

Pinterest was one of those companies that benefited from working from home businesses during the pandemic. In February, the company reported its first full-year profit and more than $2 billion in annual revenue. Revenue grew 18% in the quarter that ended in March from a year earlier, but global active monthly users fell 9% and the company posted a net loss of $5 million as people began spending more time offline. The other big effect that also hit META and SNAP was changes to Apple Inc.’s privacy rules and a slowdown in ad spending.

Pinterest partnered with Shopify Inc. in 2020, giving its users the ability to purchase products they find on its platform by clicking on a link to a merchant’s website. In June, Pinterest acquired The Yes, an artificial-intelligence platform that customizes the fashion-shopping experience for users.

Shares in Pinterest, which has a market valuation of about $12 billion, are down around 50% year-to-date, worse than the Nasdaq Composite Index, which has fallen by about 30%. The company went public in early 2019 at $19 a share; the stock surged above $80 last year but is now below the IPO price, closing at $17.56 Thursday. The stock rose about 25% after hours before falling back to +12% when The Wall Street Journal reported on the stake.

From The TradersCommunity Research Desk

Live From The Pit