Pinterest made its market debut Thursday morning on the New York Stock Exchange, quickly trading up at $23.75, nearly 25 percent higher than its initial public offering price.
The company announced Wednesday evening it planned to sell 75 million shares at $19 a piece, which valued the business at over $12 billion. Already, the IPO price was an increase from Pinterest’s expected price range of $15 to $17 per share.
“The market seems to be giving it a warm reception,” John Tuttle, the NYSE’s COO and global head of listings, told Cheddar on Thursday just ahead of the first trade.
Pinterest ($PINS), which is used mainly as an online platform for sharing design interests, is the latest Silicon Valley darling to go public and has roused investors for months.
"I was not entirely surprised by the IPO price," said Elliot Lutzker, a former SEC attorney and partner at Davidoff Hutcher & Citron. "They were being conservative in their pre-IPO range in an effort, in all likelihood, to avoid a drop like in Lyft stock."
Lyft ($LYFT) went public last month and shares have slumped 17 percent since the IPO, leading to an investor lawsuit claiming the company had overhyped its market position.
As it seeks to under-promise and over-deliver, Pinterest has grown to serve 250 million monthly active users -- known as Pinners -- and completes over 2 billion monthly searches. Over 4 billion inspiration boards have been created by Pinners since the company’s founding in 2010.
“Investors are excited to be part of that,” Stacey Cunningham, NYSE’s president, told Cheddar, adding that she herself is a Pinner, using the platform to search for clothes, food, and home decor.
Pinterest, however, isn't profitable, making it the latest tech startup to go public before proving to investors it can make more money than it spends to sustain its business.
The San Francisco-based company earned $755.9 million in revenue in 2018, an increase from $472.8 million in 2017, according to its filing with the federal Securities and Exchange Commission. However, Pinterest generated a net loss of $130 million in 2017 and $63 million in 2018.
"For 2018 their loss of about 8 percent for each dollar of revenues is far less than Lyft’s approximate 41 percent loss on revenues, or what Uber has shown to date," Lutzker noted.
Pinterest said its growth strategy is based on improving Pinner products, such as making the site more shoppable, increasing advertising products and capabilities, and developing stronger advertiser relationships.
“We’re still in the early stages of our monetization efforts,” the company wrote in its SEC filing. “Our ability to develop new and improve existing advertising products will be an important driver of our future growth.”’
In its value proposition to advertisers, Pinterest touted its much-sought-after millennial audience, 67 percent of which is female. That includes eight out of 10 moms in the U.S., women who “are often the primary decision-makers when it comes to buying products and services for their household,” according to the company.
Pinterest also said that since consumers use the platform for inspiration, the “alignment between Pinner and advertiser objectives differentiates Pinterest from other services."
“They have to demonstrate a clear pathway to profitability for the company, sustaining losses indefinitely is not necessary something investors are going to be warm to,” Tuttle said.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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