Pinterest soars after Elliott Management buys 9% stake

pinterest shares jumped more than 20% in extended trading on Thursday after It is reported by The Wall Street Journal. that Elliott Management has accumulated over 9% of the company’s shares.

Elliott, known for its heavy investment, has been talking to Pinterest about unspecified matters over the past few weeks and has told the company that it is now the largest shareholder. informedciting unnamed sources.

Before after-hours popularity, Pinterest’s shares fell 75% last year as the social network struggled to retain users. While revenue rose 52% in 2021 to top $2.5 billion, monthly active users worldwide fell 6% to 431 million, a worrisome sign for investors worried about the app’s declining popularity.

The Pinterest app on an Apple MacBook Air.

Guillaume Payen | SOPA images | Light rocket | Getty Images

Co-founder Ben Silbermann resigned from the CEO position at the end of June. He was replaced by Bill Ready, former Google head of commerce, which indicates that the company is ready to increase investment in the development of its business in the field of e-commerce.

Elliott has some experience with struggling online advertising companies. In 2020 Twitter reached to deal with with Elliott and Silver Lake by giving these firms board seats and initiating a $2 billion share buyback program. Twitter also received a $1 billion investment from Silver Lake as part of the deal.

Prior to the agreement, Elliott was trying to remove then-CEO Jack Dorsey from his executive position. Although Dorsey survived Elliot’s efforts, he eventually left Twitter in 2021. According to FactSet, Elliot purchased 10 million Twitter shares between early 2020 and July 2021 and still owns them all.

CNBC contacted Pinterest and Elliott Management for comment, but neither responded immediately.