Elliott - Elliott Asset Management sets its sights on Pinterest

Highlights Aug.29,2022 19:44

As of June 2022, Elliott Management Corp. (Elliot) has taken a substantial stake in Pinterest Inc., according to people familiar with the matter, as the once-hot social media company grapples with users Declining numbers and other challenges.

Elliot told the company that it is Pinterest's largest investor and has taken a more than 9% stake -- partly common stock -- in recent months, one of the people said. The investment firm has been in discussions with Pinterest over the past few weeks.

It's been a tumultuous time for Pinterest, which operates a free online platform for sharing images that inspire projects like planning a wedding, completing home improvements and creating recipes.

Pinterest's business has grown dramatically during the pandemic, and in February, the company reported its first full-year profit and more than $2 billion in annual revenue. But while revenue rose 18% year over year in the quarter ended March 2022, global active monthly users fell 9%, and the company reported a $5 million net loss as people began spending more time offline as coronavirus restrictions eased. Changes to Apple's privacy rules and slowing ad spending also weighed on the company's results.

Shares of Pinterest, which has a market value of about $12 billion, have fallen about 50% so far in 2022, underperforming the tech-heavy Nasdaq Composite, which is down about 30%. The company went public at $19 a share in early 2019; the stock surged above $80 in 2021, but is now below its IPO price, trading at $17.43 Thursday afternoon.

Known as one of Wall Street's best-known activist firms, Elliot has taken on tech companies and others and forced changes such as reshuffling of salespeople or executives.

Last year, Twitter Inc. co-founder Jack Dorsey resigned from the top job after facing pressure from Elliot. Elliot took about $1 billion in Twitter shares in 2020 and later struck a deal to appoint two new members to an eight-member board.

In 2019, Elliot and other activist investor Starboard Value LP criticized the performance of online marketplace eBay Inc. Elliot's Jesse Cohn is one of three new additions to eBay's board. Six months later, CEO Devin Wenig resigned.

Elliot managed more than $50 billion in assets at the end of last year and also owns a private equity arm, Evergreen Coast Capital, that sometimes bids for companies targeted by Elliot's aggressive investment plans.