- Pinterest’s IPO team wants investors to see the company as a visual search engine in line with Google, according to a source familiar with the pitch.
- The team has also taken pains to dispel the notion the Pinterest is a social media site or comparable to the photo-sharing app Snapchat, which has sunk in value since it went public in 2017, the person said.
- Pinterest is expected to go start trading on Thursday on the New York Stock Exchange under the ticker symbol "PINS."
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Pinterest wants investors to know it’s not like Snapchat.
During recent meetings with investors ahead of its upcoming IPO, Pinterest’s team has gone to pains to position the company as a visual discovery tool. A key part of the sales pitch during Snap’s recent IPO roadshow, according to a source familiar with the matter, is that the company has more in common with the early days of Google’s search engine business than with the photosharing teen sensation Snapchat.
Establishing that identity is crucial as Pinterest prepares to begin trading on Thursday, in an $11 billion tech IPO clouded by some unfortunate comparisons.
The most recent high-profile social media company to go public, Snap priced its shares $17 a pop in its 2017 IPO only to watch them sink below $5 by the end of 2018. Snap’s pitiful performance in the public markets was on investors’ minds as Pinterest made the rounds, the person told Business Insider.
And of course, there’s been the recent price fluctuations for Lyft, which went public on March 29 above its price range only to fall far below in the following weeks of trading.
Silbermann versus Spiegel
Pinterest founder and CEO Ben Silbermann has played an important role in efforts to make a good impression with investors and to stand apart from Snap, whose CEO Evan Spiegel has had a rocky relationship with Wall Street, the person said.
As founders, both Spiegel and Silbermann have dual class structures which empower them to maintain voting control over the company, even if they sell much of their stakes. So a good first impression from Silbermann could go far with investors as they weigh whether to invest in a company where their shares don’t enable them to impact decisions.
Read more: Zoom raised its IPO price range and could begin trading Thursday with $9 billion valuation
Despite its rejection of the social media label, some of Pinterest’s underwriters compared the company to Twitter and Facebook, in part because of business models which rely on advertising, the person said.
Some investors were concerned about the difficulty of advertising on Pinterest, compared to a company like Facebook, the person said. In response, Pinterest’s team argued that the nine-year-old company was still very early in building out its advertising business.
It’s still to be seen how these concerns will impact where the stock prices.
On April 8, the company set a price range of $15 to $17 a share for a high valuation of $11.3 billion — a down round for the company which was last valued at $12.3 billion on the private markets.
The Wall Street Journal reported Wednesday that the company could price above this range. The company is expected to set a price on Wednesday night and to start trading Thursday on the New York Stock Exchange under the ticker symbol "PINS".
Pinterest generated $755.9 million in revenue in 2018, up 60% from $472.9 million in 2017. The company lost $63 million in 2018, down from $130 million in losses in .2017.
Pinterest also uses average revenue per user as a metric for measuring growth, a common metric for companies that rely on advertising revenue. In 2018, Pinterest’s global ARPU was $3.14, up 25% from 2017. In the US, its 2018 ARPU was $9.04, and internationally it was just $0.25.
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See Also:
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- AN UNLIKELY REVOLUTIONARY: How Tristan Harris went from working at Apple and Google to consulting with heads of state about how to reform Silicon Valley
- The average Pinterest employee has $700,000 in equity according to a report which warns of disruption if the IPO is volatile
Source: Business Insider – bpeterson@businessinsider.com (Becky Peterson)