Investor Elliott: One billion US dollars for Pinterest

Activist investor Elliott is buying Pinterest shares worth one billion US dollars, making it the social media platform's largest shareholder. According to Pinterest, the fresh capital is to be used to finance a new share buyback program worth 3.5 billion US dollars. This is almost a third of the company's market capitalization. Pinterest's struggling share price saw strong gains after the plans became known.

An involvement of the prominent hedge fund Elliott Investment Management in companies is "bringing fresh ideas as well as operational and financial discipline that could boost sagging businesses," writes the news agency Reuters. According to Reuters, Elliott already held a 4.8 percent stake in Pinterest worth a good 725 million US dollars. "We have been steadfast supporters of Pinterest since we first invested in 2022 ⁠and have strong conviction in the company's trajectory," said Elliott partner Marc Steinberg, who also sits on Pinterest's board of directors.

Not all investors are so optimistic. Since the beginning of the year, Pinterest's stock has lost almost a third of its value. While user numbers are increasing, the question is whether this increase can be translated into higher advertising revenue, especially since the online advertising market is fiercely competitive with financially strong competitors like Instagram and Facebook. Even OpenAI announced that it would test advertising in its ChatGPT chatbot. Only a few weeks ago, it became known that Pinterest plans to lay off up to fifteen percent of its workforce. The move is intended to free up more resources for the development of AI functions and products. To allay investor concerns, Pinterest has recently intensified its efforts to benefit from the increasingly widespread use of AI-powered shopping tools.

(akn)