Pinterest (NYSE: PINS) shares are up over 13% on Friday following a Wall Street Journal report that Elliott Management has acquired a stake of over 9% in the company.
Pinterest’s Largest Investor
The report notes that Elliott is now the largest shareholder in Pinterest after informing the company it has amassed a stake. Two sides have been locked in talks for several weeks already, the WSJ report added.
Even though Pinterest’s revenue grew 52% in 2021 to reach $2.5 billion, the popular social media service has been struggling with website visits lately. In the last year, Pinterest’s global monthly active users fell 6% to 431 million.
This isn’t the first time Elliott Management decided to invest in an online advertising business in decline. Back in 2020, Eliott and Silver Lake reached an agreement with Twitter for a $2 billion share repurchase program, which also entitled them to board seats. Twitter additionally received a $1 billion investment from Silver Lake.
In the same period, Elliott obtained 10 million Twitter shares which he still owns today, as reported by FactSet.
Leadership Changes
News of Elliott’s acquisition doesn’t come as a surprise since Pinterest already started making changes by the end of June, when their 12-year-long CEO, Ben Silbermann, stepped down, handing over the position to the former president of Google commerce, Bill Ready.
This marked the company’s clear intention to focus on e-commerce in the future, considering that Ready is a 42-year-old executive with a lot of experience in commerce.
Before becoming a Google Commerce executive he was also in charge of commerce and payment operations at Alphabet Inc-owned search giant and held a senior leadership role at PayPal. At that time it was decided that Ready will also join the board.
Silbermann was one of the co-founders of Pinterest and takes a lot of credit for its fast growth in the last 12 years therefore he retained his board seat while also taking a new role of executive chairman.
Pinterest’s first big step to e-commerce will be the launch of merchant features, including product tagging on Pins and a Pinterest API for Shopping.
Supporting Merchants
The “API for Shopping” feature will allow merchants to access the new catalog management and product metadata features for more efficient data quality of the products. The merchants who used this feature already are seeing a 97% accuracy level for available data and price, the company said.
Meanwhile, the “Product Tagging on Pins” tool allows merchants to make their lifestyle Pins shoppable. They can add products from their catalog to their scene images which then enable users to swiftly shop items from the imagery they find and like.
The product catalog will also feature video assets, allowing users to view the product from various angles. From now on, business profiles will also feature a “Shop Tab”, that will enable merchants to display shoppable products with ease.
“At Pinterest, our goal is to turn inspiration into action, and our vision for shopping is to make it possible to buy anything Pinners are inspired by on the platform,” the company’s senior vice president of Engineering Jeremy King said.
“In 2021, the number of Pinners engaging with shopping surfaces on Pinterest grew over 215%, and 89% of weekly Pinners use Pinterest for inspiration in their path to purchase. The new shopping features such as the API for Shopping allows brands and retailers to reach high-intent Pinners during the earliest stage of their shopping journey with the most updated catalog data.”
On the final note, Pinterest will look to improve all of its new online shopping features by acquiring an AI-powered shopping service for fashion known as The Yes.
Summary
Pinterest shares are surging on news Elliott Management has taken a stake of over 9% in the social media company to become the single-largest investor.
