Why Pinterest Is Jumping Higher Today
What happened
Shares of Pinterest (NYSE: PINS) were running 6.3% higher in morning trading Friday as more institutional investors bought into the idea-collating site.
Pinterest stock has been battered for a good part of a year on a slowdown in pandemic-fueled growth. Shares are off 70% over the past 12 months, but both Vanguard Group and BlackRock (NYSE: BLK) have acquired substantial stakes in the social media platform, and the market might be seeing this as an inflection point at which Pinterest becomes a turnaround story.
Image source: Getty Images.
So what
Pinterest continues to see growth in its top- and bottom-line numbers. Revenue jumped 20% last quarter, and per-share profits were 14% higher in the fourth quarter. So while Meta Platforms' (NASDAQ: FB) stock is cratering as Facebook's popularity wanes and advertisers grow increasingly wary because they're no longer able to collect data and track users like before, that hasn't been a problem for Pinterest.
Advertisers are actually warming up to Pinterest more than the institutional investors because its active users are motivated buyers. They're typically collecting ideas for a craft or project, whether it's renovating a home, starting a diet, or some other goal-oriented pursuit, and that usually means they want to buy something. That's the sort of consumer advertisers want to be in front of, not those who might just have some sort of passive interest while connecting with friends and family.
Now what
Vanguard filed a Schedule 13G yesterday that showed it had accumulated an 8.74% ownership interest in Pinterest, which follows BlackRock's filing of the day before, which showed it owned 4.9% of the social media stock.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns and recommends Meta Platforms, Inc. and Pinterest. The Motley Fool has a disclosure policy.
