Pinterest pins hopes on cut-price IPO as latest tech ‘unicorn’ goes public
Pinterest, the digital scrapbooking site, has became the latest Silicon Valley “unicorn” to publish details of its plans to go public. The company’s initial regulatory filing would value the company at around $9bn, significantly less than previous valuations but a figure that could change if investors get behind the initial public offering (IPO).
Pinterest is the second of a herd of unicorns – private companies valued at over $1bn – now stampeding to list on the US stock markets.
According to the company’s filing Pinterest plans to sell 75m shares at a price of between $15 and $17. The $9bn valuation for the whole company is $3bn less than the $12bn Pinterest was valued at in 2017 when it last raised money.
The sale comes after Lyft, the ride sharing technology company, went public late last month. Lyft’s sale was enthusiastically embraced by investors but stalled on its second day as Lyft’s share price fell below their IPO price. They have since recovered and are now trading at a small premium to their initial $72 sale price.
Pinterest will be followed by even larger share sales from companies including Airbnb, Uber and WeWork. But unlike many of its peers the social media company is not hemorrhaging cash.
Lyft lost $911m in the year before its IPO, the most money ever lost by a company ahead of a share sale. But that record will soon be eclipsed. Its larger rival, Uber, lost $1.8bn last year and WeWork, the office rental company, lost $1.9bn.
Pinterest, which launched in 2010, claims more than 250 million active monthly users and more than 2bn monthly searches.
The platform allows people to search for and “pin” images that interest them, whether it’s fashion, sports, pets or travel.
Pinterest has long shunned the label of being a social network. It doesn’t push users to add friends or build connections. That means it’s avoided the privacy tangles that have ensnared companies like Facebook.
Pinterest makes advertising revenue when businesses promote pins in users’ feeds.
The San Francisco company had revenue of $756m last year, a 60% bump from 2017. It had a loss of $63m in 2018, compared with a loss of $130m in 2017.
Pinterest was founded in 2010 by Ben Silbermann and Evan Sharp, who are the company’s CEO and chief product officer, respectively. As with many other founder-led technology companies, Pinterest will use a dual-class structure that ensures management and existing investors retain control of the company. Their shares will have 20 votes a share compared with public investors, who will get one vote a share.
Pinterest’s stock will list on the New York stock exchange under the “Pins” ticker symbol.