CEO Shuffle: Pinterest Stock Jumps After Ben Silbermann Steps Down — Is It a Good Time to Buy?

Pinterest IPO at New York Stock Exchange, USA - 18 Apr 2019
JUSTIN LANE / EPA-EFE / Shutterstock.com

Effective June 29, Bill Ready — veteran exec and now-former President of Commerce at Google — will be handling CEO duties for the visual inspiration platform Pinterest, taking over for Ben Silbermann. The announcement Tuesday resulted in an after-hours trading increase in Pinterest shares of more than 5%. But, even before the news, many stock prognosticators had Pinterest as a firm hold or buy.

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Silbermann will continue with the hobby-sharing site he co-founded in 2010 and took public 2019, serving as the company’s first Executive Chairman, per CNBC.

In a statement, the outgoing CEO had high praise for Ready, who has experience with high-level commerce business gigs, having previously worked for Google and PayPal. “In our next chapter, we are focused on helping Pinners buy, try and act on all the great ideas they see. Bill is a great leader for this transition,” said Silbermann. “He is a builder who deeply understands commerce and payments.”

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Ready is enthusiastic, too, stating in a LinkedIn post, “As someone who has spent most of my career in commerce and payments, it’s so clear to me that Pinterest has the opportunity to build something unique — something special.”

Ready isn’t the first person to see the massive commercial potential in Pinterest, and investment experts like Baird’s Colin Sebastian and Bernstein’s Mark Shmulik are applauding Pinterest’s move toward a commerce-first company, per MarketWatch.

“This leadership switch comes after a difficult post-pandemic period for Pinterest, where user declines and a tricky pivot to creators and commerce have damaged Pinterest’s growth story, compounded by a bearish macro environment,” Shmulik noted. “Especially as tech investors begin favoring profitability over growth at any cost, a material push into e-commerce should be welcomed.”

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The “difficult post-pandemic period” for Pinterest included a 75% decrease in share price over the past year and declining monthly user numbers, according to The Motley Fool. Possibly attributable to consumers returning to offline interests, work and shopping, Pinterest has about 433 million monthly active users now, down from 478 million in the first quarter of 2021, per MarketWatch.

However, according to The Motley Fool UK, the company has potential and a few admirable qualities, making it a potentially good buy, or definite hold. Not only is its stock cheap, but the company operates with “a flawless balance sheet, a mountain of cash at $2.7bn, and zero debt.”

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It has also been active in partnering with and acquiring like-minded firms to attract more users. After acquiring video creator Vochi and AI-powered shopping platform The Yes, Pinterest recently reached a content-delivery arrangement with media company Tastemade. The creator of cooking, travel and design video content will produce 50 new shows that will launch exclusively on the hobby-sharing site.

Shares of Pinterest have decreased 45.8% in 2022, and are down around 76% from 52-week highs. Its share price has fluctuated a little over the last month ($19.35 average; $17.11 low; $21.47 high), but remains intriguing right around the $20.00-per-share mark today.

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Aside from the odd over-enthusiastic “buy” recommendation, most analyst sites like Benzinga and The Motley Fool lukewarmly recommend purchasing Pinterest stock, especially if you are prepared to hold it over the long-haul.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.

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