(Corrects name to Bill Ready, from Bill Reddy in paragraph 5)
By Yuvraj Malik
Activist investor Elliott Investment Management disclosed on Monday it had become the largest shareholder in Pinterest Inc, backing the management of the digital pin-board firm and sending the company’s shares up 21 per cent in extended trading.
“Pinterest is a highly strategic business with significant potential for growth, and our conviction in the value-creation opportunity at Pinterest today has led us to become the company’s largest investor,” Elliott man ageingpartner Jesse Cohn and senior portfolio manager Marc Steinberg said in a statement.
Elliott did not disclose its stake in Pinterest, and did not immediately respond to a Reuters request for comment.
The Wall Street Journal had reported in July that Elliott had amassed a more than 9 per cent stake. (https://reut.rs/3zp1smr)
Elliott backed the new chief executive, Bill Ready, who took over on June 29, saying that he “is the right leader to oversee Pinterest’s next phase of growth,” and also commended co-founder Ben Silbermann for the leadership transition.
The disclosure came as Pinterest reported a lower-than-expected profit due to higher costs and users spending less time on the digital pin-board platform.
Excluding items, Pinterest earned 11 cents per share, compared with analysts’ estimates of 18 cents, according to IBES data from Refinitiv.
Revenue, which grew 9 per cent to $665.9 million, also came in lower than estimates of $667 million, as the digital advertising market faces a downturn.
Like its peers, Pinterest has suffered from advertisers cutting back on budgets in response to increasing costs and recession fears. Growth has also slowed compared to last year, when people, cooped up at home, thronged Pinterest for inspiration for projects such as planning weddings, home renovations and recipes.
A strong dollar is another worry. Pinterest said it expected revenue growth of mid single-digit percentage in the current quarter, “which takes into account slightly greater foreign exchange headwinds than in Q2 2022.”
(The story corrects name to Bill Ready, from Bill Reddy in paragraph 5.)