Pinterest stock: PINS soars after Elliott Management buys over 9% stake

If you’re a recent investor in Pinterest, your day is off to a good start. The photo-based social media company’s stock price is soaring in pre-market trading after Elliott Management revealed it bought more than a 9% stake in the company—making Elliott one of Pinterest’s largest shareholders. Here’s what you need to know:

What’s going on with Pinterest? A major activist investment firm has bought a 9% stake in the company. Called Elliott Investment Management, the firm is known for making large investments in companies in an attempt to give it leverage to change the company from within.
What does Elliott want from Pinterest? Obviously, it wants to see changes, but it’s not yet clear what those changes are. Elliott has historically forced executive changes at companies, reports The Wall Street Journal, which broke the story about Elliott’s investment in Pinterest. However, in June Pinterest already replaced its CEO. It’s unknown how Elliott feels about the new one.
Can Elliott force changes at Pinterest? Maybe. While the WSJ reported that Elliott now owns over 9% of Pinterest, it notes that Ben Silbermann, its CEO until last June and one of the company’s cofounders, still owns 37% of the company. That slice of ownership—and the voting rights it conveys—gives Silbermann a lot of leverage.
How has Pinterest stock performed this year? Not well at all. PINS is down more than 50% for the year (compared to the Nasdaq’s 30% drop).
How has PINS reacted since the Elliott news? Very well. While PINS is down from its January highs of just above $36 per share, the company’s stock price is soaring in pre-market trading today. At the time of this writing, PINS is up nearly 15% over its closing price (July 23, 2022) to $20.19 per share.