Pinterest Analyst Says Elliott Management's Impact 'Could Be Limited': What Investors Should Know


Pinterest Inc (NYSE: PINS) rallied 14.8% on Friday following reports that activist investor Elliott Management has taken a 9% stake in the company.

What Happened? On Thursday, the Wall Street Journal reported Elliott Management has taken a sizable stake in Pinterest and has been conducting talks with the company. Pinterest has been struggling with declining monthly active user numbers, and former CEO Ben Silbermann stepped down from the position in June. Prior to Friday's gains, Pinterest shares had been down 75% over the past year.

Related Link: Here's Why Pinterest Stock Is Popping Off Today

Why It's Important: On Friday, KeyBanc analyst Justin Patterson said there are likely four reasons Elliott is interested in Pinterest:

  1. The stock has significantly lagged in recent months.
  2. The company's user growth has stagnated.
  3. Pinterest has intrinsically high margins and significant free cash flow potential.
  4. The company's estimated 2022 operating expenses are significantly higher than …

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