- Activist Elliott becomes picture platform’s biggest stake owner
- Stock has lost 80% of value in 15 months
- Monthly active users fell sharply in 2021 to 431 million
Global activist investor Elliott Investment Management has taken a 9% stake in Pinterest (PINS:NYSE) in an attempt to freeze the exodus of users and bolster the share price.
The picture-sharing social media platform has seen its shares lose 80% of their value in 15 months, falling more than 50% this year.
Elliott clearly sees an opportunity, becoming Pinterest’s largest shareholder at a stroke and sparking a 14% rally in its share price in after-hours trading overnight.
As it stands, Pinterest stock is set to re-start trading $2.50 higher at $20 when Wall Street reopens later today, according to Google Finance.
Pinterest lost 47 million monthly active users in 2021 as people lured onto the platform by pandemic lockdowns returned to pre-pandemic behaviour. At the end of 2021, Pinterest reported 431 million MAUs, down from 478 million at the end of 2020.
That didn’t prevent the company chalking up its first ever net profit of $316.4 million for 2021. MAUs in this year’s first quarter nudged modestly higher to 433 million, but that failed to halt steep share price declines, luring Elliott in.
MANAGEMENT MERRY-GO-ROUND
Pinterest has seen a flurry of executive departures, with co-founder Ben Silbermann stepping down as chief executive in June 2021 to become executive chairman, a position he will stay in for now. Silbermann owns a rough 6% stake in the business.
He was replaced as CEO by Bill Ready, previously president of commerce at Alphabet (GOOG:NASDAQ)’s Google, and COO at PayPal (PYPL:NASDAQ) before that.
Pinterest’s focus has been on converting its MAUs into regular product buyers, purchasers who will buy stuff based on their pin collections and topic searches.
As Silbermann stepped back from the CEO role, the co-founder’s parting words were: ‘In our next chapter, we are focused on helping Pinners buy, try and act on all the great ideas they see.
