Pinterest shares rise after Elliott reveals it’s largest shareholder

Screens display the Pinterest Inc. company logo during the company’s IPO on the front of the New York Stock Exchange (NYSE) in New York, U.S., April 18, 2019. REUTERS/Brendan McDermid

Aug 1 (Reuters) – Activist investor Elliott Investment Management revealed on Monday that it has become the biggest shareholder of Pinterest Inc (PINS.N), backing the digital bulletin board company’s management and pushing shares higher of the company by 21%.

Pinterest has “significant growth potential,” leading Elliott to become its largest shareholder, Elliott managing partner Jesse Cohn and senior portfolio manager Marc Steinberg said in a statement.

Elliott did not disclose his stake in Pinterest. However, the Wall Street Journal reported in July that the investment firm had amassed a stake of more than 9%. (https://reut.rs/3zp1smr)

The company on Monday backed Pinterest chief executive Bill Ready, who took over on June 29, and also congratulated co-founder Ben Silbermann on the leadership transition.

Elliott and Pinterest management recently had “a very collaborative and engaged dialogue,” Ready said during a post-earnings conference call.

“As a visual search engine, Pinterest gives businesses a distinct way to market. I think Elliott might have something here,” said Michael Schulman, chief investment officer at Running Point Capital.

Elliott has also built a stake in PayPal Holdings Inc (PYPL.O), Bloomberg News reported (https://reut.rs/3QcHXnL), and has previously bought stakes in companies such as eBay inc (EBAY.O) , Twitter Inc (TWTR.N) and AT&T Inc (TN).

Shares of Pinterest rose to $24.36 after Monday’s bell, still a far cry from their all-time high of $89.90 hit in February 2021, when people, cooped up at home during the pandemic, swarmed the company to find inspiration for projects.

Elliott’s statement came as Pinterest reported lower-than-expected earnings due to higher costs and users spending less time on its platform.

Like its peers, Pinterest has suffered from shrinking advertiser budgets in response to rising costs and recession fears.

The company has seen weakness among advertisers in the consumer packaged goods category, big-box retailers and mid-market advertisers, Chief Financial Officer Todd Morgenfeld said, adding that the digital advertising environment will continue to be difficult.

The company said it expects mid-single-digit percentage revenue growth in the current quarter, crimped by the impact of a stronger dollar.

Reporting by Yuvraj Malik and Mehnaz Yasmin in Bengaluru; Editing by Maju Samuel

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