Pinterest Picks Up an Activist Investor

view original post

The Pinterest app on a smartphone. Activist Elliott Management has reportedly bought a large stake.

Gabby Jones/Bloomberg

Bullish investors are hoping social-media platform Pinterest can get its mojo back with a new CEO and an activist investor on board.

Activist hedge fund Elliott Management has amassed a 9% stake in the Pinterest (ticker: PINS), according to recent reports. While the $50 billion hedge fund declined to comment, it’s easy to see why Pinterest would be a target.

Pinterest stock was down more than 50% this year before Elliott’s involvement was reported, as the stock tumbled in the tech selloff. Worries of a slowdown in discretionary spending—images of home design and fashion are Pinterest’s bread and butter—also didn’t help. Only a quarter of analysts surveyed by FactSet rate shares at Buy, down from 50% a year ago.

Pinterest appears to be taking its woes seriously. Last month, it announced that Bill Ready, former president of commerce at Alphabet ‘s (GOOGL) Google, would succeed co-founder Ben Silbermann as CEO. Before Google, Ready was chief operating officer at PayPal Holdings (PYPL), making him “well positioned” to accelerate Pinterest’s shopping initiative, according to Thomas Champion, an analyst at Piper Sandler.

Champion rates Pinterest stock at Neutral but sees Elliott’s involvement as positive for shares. He expects the activist to push for changes and, perhaps, a sale. PayPal and Microsoft (MSFT) reportedly had an interest in Pinterest when shares were around $50; now the stock is less than half that.

Pinterest won’t talk about Elliott’s involvement, but investors will probably get an update with second-quarter results on Aug. 1.

Write to Carleton English at carleton.english@dowjones.com