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The Growth of Pinterest Users Pushes Its Stock Up

Pinterest shares rise after user numbers and Elliott's investment reveal despite poor financial results

Pinterest shares jumped after user numbers were revealed, although profits and revenue failed to reach analysts’ estimates, with the company providing weak guidance for the third quarter, but what also boosted the stock’s performance was the announcement of the active investment firm Elliot Management separately that it was the largest investor in Pinterest and saw it as an opportunity to “create value,” as it described it.

The social media platform earned 11 cents per share during the second quarter, on an adjusted basis, compared to expectations of 18 cents per share, while revenue came in at $666 million, slightly below analysts’ estimates of $667 million, and Pinterest reported that the number of monthly active users decreased by 5% compared to last year to 433 million users, and although this decline raises the concern of the social networking application that relies on user views to attract advertisers, analysts were expecting a larger decline in monthly active users to 431 million user.

The company’s poor results are in line with the broader wave in the social media market, where Twitter, Snap and Facebook-owner Meta posted disappointing quarterly results during the second quarter, and all of these companies blamed the weakness of the online advertising market, which severely damaged the results. Read more [Shocking Results and Prospects in The Giant Meta].

Pinterest’s guidance for the next quarter was even worse than its second-quarter results, as the company expects third-quarter revenue to grow by a single average year-over-year, well below analysts’ estimates of 12.7% growth. Read more [Pinterest Stock Jumps 25% After Strong Results]

Elliott’s investment in the company was revealed last July by the Wall Street Journal, which announced that the investment firm had acquired more than 9% of Pinterest. Read more [Elliott Management Announces a 9% Stake in Pinterest].

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