![]() Looking beyond such rumors, Pinterest is a social media company that is experiencing slowing growth, a senior leadership transition, and has a valuation that is extremely high relative to its peers. That’s evidenced by the fact that the PayPal acquisition failed to materialize. While a potential buyout from PayPal was intriguing, a rumor is never a good reason to buy a stock. ![]() Pinterest also has a sky-high price-to-earnings ratio of 165.33, which has led some on Wall Street to label the stock as being “overvalued.” By comparison, the average price-to-earnings ratio among companies listed on the tech-heavy Nasdaq stock exchange is 30. In its most recent quarterly earnings report, Pinterest announced that it had lost 24 million monthly active users due to the economic reopening, news that sent the share price sharply lower. Much of the reason for the drop in PINS stock this year has been repeated warnings from the company that its number of users is cooling off as people emerge from Covid-19 hibernation and look for distractions outside their home. 7 Retail Stocks to Buy Regardless of Supply ShortagesĪlso at issue is the slowing growth that Pinterest is experiencing coming out of the pandemic.The loss of Evan Sharp puts Pinterest at a bit of a crossroads, according to analysts who cover the company. ![]() It was Evan Sharp who started Pinterest as an “online scrapbook” and photo-sharing platform in 2010 along with Ben Silbermann, who remains the company’s CEO. That’s a new design firm led by Jony Ive, the designer of many of Apple’s (NASDAQ: AAPL) most iconic consumer electronic products. Pinterest co-founder Evan Sharp recently announced that he is stepping down as chief creative officer to join LoveFrom. Looking beyond an eventual buyout, there are reasons for investors to be cautious with PINS stock. Analysts say they expect to see a wave of social media and fintech tie-ups within the e-commerce space over the next few years. The rumors that PayPal was interested in Pinterest came after the fintech giant purchased online coupon finder Honey Science in 2019 for $4 billion, and bought Japanese buy-now-pay-later firm Paidy for $2.7 billion earlier this year. According to Pinterest, online shoppers are increasingly buying items they see on social media websites, especially when products are recommended by so called “influencers.” Buying Pinterest would an online payments company to capture a greater share of the e-commerce space and diversify its income through sales of online advertisements.Īnd online payments and fintech companies have been scooping up social media companies lately. The expansion into online shopping maybe what ultimately makes Pinterest attractive to digital payments company such as PayPal. Pinterest recently announced new features that enable sellers to upload product images and catalogues and make them available to online audiences. With a potential acquisition now off the table, investors are rightly wondering where Pinterest goes from here?īeyond the rumored $45 billion acquisition by PayPal, San Francisco-based Pinterest, which attracted a lot of new members during Covid-19 lockdowns and generates money from digital advertising, is increasingly moving into online purchases. ![]() The social media company’s share price promptly reversed and fell 18%, dropping back down to $50. That announcement was like a bucket of cold water in the face of PINS shareholders. 25, PayPal broke its silence and addressed the rumors, saying that it is not in talks with Pinterest and has no plans to purchase the social media company. Even after the 13% increase on the PayPal rumor, Pinterest shares were still down 5% on the year by close on Oct. After soaring in 2020 during the pandemic, Pinterest’s share price had fallen about 20% before the rumor’s spread. While no formal takeover had been announced, the rumor alone was enough to give PINS stock a much-needed lift. 20 after it was reported that fintech giant PayPal was in talks to acquire it. Shares of Pinterest, the popular image sharing and social media company, jumped 13% on Oct. ![]()
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