Pinterest Inc. is expected to make a deeper push in trading under its new CEO, a move received with some applause among Wall Street analysts despite a silent reaction from the shares.
The company’s stock, which helps people gather inspiring ideas over the Internet, fell 1.4% in Wednesday morning’s trading after Pinterest PINs,
announced one afternoon before co-founder Ben Silbermann would step down as CEO and be replaced by Bill Ready, a GOOG veteran of Alphabet Inc.
Google and PayPal Holdings Inc. PYPL,
According to FactSet data, shares had risen as much as 11% in out-of-hours operations on Tuesday.
“I absolutely believe Pinterest has the potential to be a 100-year-old company,” Ready wrote in a LinkedIn post. He added that Pinterest will seek to “help people engage more deeply” with what they see on Pinterest and said their training in commerce and payments gives them confidence that Pinterest can “build something unique.”
Opinion: Pinterest’s new CEO faces a tough road to getting users to buy instead of staring
Baird’s Colin Sebastian saw the move as “incrementally positive” for Pinterest history.
“We’ve long highlighted the potential of Pinterest to become a fully functional trading platform, and recent product development and leadership changes suggest it’s now a company priority,” he wrote. While Sebastian expects “short-term trends to remain difficult” for the company, he sees the news about the CEO change “as a positive step toward realizing Pinterest’s potential.”
Bernstein’s Mark Shmulik was also optimistic about the opportunity to make trading a bigger part of Pinterest history.
“This change in leadership comes after a difficult post-pandemic period for Pinterest, where users are declining and a tricky turn toward creators and commerce has damaged Pinterest’s growth history, exacerbated by a bearish macro environment,” he wrote . “Especially when technology investors begin to favor profitability above growth at any cost, a material boost to e-commerce should be welcomed.”
In addition, Shmulik noted that Ready is getting a “unique” compensation structure that “forces one to economically and mentally acquire the vision of unrealized potential on Pinterest”. Beyond a “standard compensation package,” you will receive $ 20 million in restricted shares if you buy $ 5 million of common stock from Pinterest within 60 days of joining, Shmulik wrote.
Rosenblatt Securities analyst Barton Crockett, however, was more mixed in light of the recent growth problems of Pinterest users. The company had 478 million monthly active users in the first quarter of 2021, as people claimed inspiration amid the pandemic, but since then the count has dropped to 433 million.
“Ready has a substantial history in fintech and e-commerce, seemingly appropriate for Pinterest’s pivot from pure inspiration to e-commerce inspiration,” Crockett wrote. “But while Ready’s current title at Google is president of Commerce, Payments and Next Billion Users, we see the risk that Ready won’t have experience in growing social media audiences, which is arguably the biggest challenge from Pinterest now “.