Pinterest stock jumps after Elliot says he’s the biggest investor

Stock pinterest jumped 14% on Tuesday morning, a day after active investor Elliott Management confirmed it was Pinterest’s biggest investor.

This step was taken despite the fact that Pinterest disappointing second quarter results on Monday night.

“Pinterest is a highly strategic business with significant growth potential, and our belief in Pinterest’s ability to create value today has led us to become the company’s largest investor,” Elliott. said Monday. Elliott’s participation on Pinterest was announced in July Wall Street Magazinewhich stated at the time that the firm had acquired over 9% of the company’s shares.

Pinterest’s monthly active users worldwide fell 5% year-over-year to 433 million, and while the fall is worrisome for a social media app that relies on eyeballs to attract advertisers, analysts had expected a sharper decline to 431 million users. .

companies financials were dismal, as is his comment about what’s going to happen this quarter. Pinterest said it expects third-quarter revenue to grow “by mid-single digits year-over-year as a percentage,” below analysts’ forecasts for sales growth of 12.7%.

Analysts at Goldman Sachs said Pinterest’s earnings report is “a tale of two different stories.” On Tuesday, they wrote that in the short term the company remains at the center of a volatile macroeconomic backdrop, but in the long term it could reach its “long-discussed” potential.

Analysts said that “management’s comment on the expected margin increase in 2023 (although this is not yet formalized guidance) could make PINS a platform for sustainable revenue and profitability growth if the opportunities presented are realized.”

Analysts at Morgan Stanley said Tuesday that while Pinterest’s earnings were better than feared, its management will still need to successfully improve several areas of the company.

“PINS may be trading well given the tactics given the positioning and the new hope for a change in management,” they said, “but as described above, we need more details on why/how management intends to implement the PINS capability… and/or evidence from partners that trends in these areas are improving.”