Welcome back to closing bell and cheddar news. Everyone
take a look at Pinterest after hours. The stock
up 20%. So very nice games just shy of
24 bucks a piece. I did miss earnings results
, but the company's stock jumping as investors seem to
think that it could have been a lot worse and
as it gets major support from a very big activist
investor. So I do want to bring back channel
news, senior reporter Michelle Castillo to help us break
this down. Michelle what a Pinterest report and why
is the stock popping so much despite the miss?
You know, let's go talk about the top and
bottom line just for anyone who might have missed it
earlier. So Pinterest came in at 11 cents per
share on an adjusted basis, the analysts estimate was
18 cents per share according to refinitiv and revenue came
in a little light at 666 million. The estimate
was 667 million. So overall you would think this
is not great news for the company, but in
this case and especially when it comes to social media
stocks showing revenue growth is better than not showing revenue
growth at all. So they had a growth rate
of 9% year over year. Um, let's compare
that to someone like twitter, which actually declined 1%
year over year. And they also said that they
would continue to grow single Digits in the next quarter
, compare that to snap, who wouldn't even give
guidance and said so far the third quarter was looking
flat for them, so there's a couple of good
things there. Another thing that's interesting to note is
Pinterest did note about a 5% decrease in monthly active
users down to 533 million. However, the street
was expecting them to report a further loss down to
531 million. So beating their, I think gave
people a little bit more confidence and they are pretty
confident with the new ceo bill ready definitely seeing that
they're going to be investing more in e commerce.
And shopping a smarter strategy as advertisers at this time
pull back from, pull back from spending on ads
that aren't directly leading to sales. But Pinterest seems
to have some of those mechanisms in place to ensure
that if you spend a dollar, someone will buy
something. And I think that makes at least investors
on the street a little bit more confident that this
is the smartest strategy at that time. Well,
what other insights Michelle were we able to glean from
this report? Because it does feel like such a
momentous time, Such an important time. That is
perhaps an inflection point for this overall social media industry
. Well, I think the pivot to shopping and
e commerce is really one of the things that Pinterest
is trying to hammer down at this time, the
fact that they as a platform, this is the
perfect place to spend your dollars if you want to
lead to a direct sale. In fact, they
said, shopping ads revenue in particular grew at double
the rate of the average revenue. So I said
they were growing at a rate of 9%. Shopping
ads revenue actually grew at a rate of 18% and
this is where the company is willing to invest.
So I think that's why you're seeing investors also say
, hey, this is a good strategy going forward
for this company. In june of 2022 they purchase
ai shopping recommendations platform. The yes, they installed
the Ceo as their head of shopping. Um,
so really looking to gear that up in the near
future, we already know that several brands, they
highlighted some of the letter to shareholders, including scotch
tape have really seen good sales because of working with
Pinterest and if this is where advertisers and brands are
going to be putting their money into performance, marketing
a. K leading to a direct sale. This
company is really positioning themselves as one of the places
that you have to be on. So, good
news for them. I think they chose a smart
strategy. Well, I know that we had heard
in the past several weeks ago that big time activist
investor based here in new york, Elliott management was
taking a stake in Pinterest and giving in fact a
vote of confidence in this report for both Pinterest and
the Ceo Bill ready. How much of an impact
Michelle do you think that that's having, you know
, just showing that they're confident in the leadership change
is a huge difference. So just a few weeks
back, Elliott man, um, it was revealed
that in The Wall Street Journal report that they had
been buying more and more of the company. Their
steak is a little bit more than 9% at this
time. Now this could indicate that this is going
to be a hostile takeover, but people don't think
that actually is the case. Um, the former
Ceo Ben Silverman, he does have about 37% of
the vote. So it would be hard to have
a hostile takeover by an activist group like Elliott management
, but this just shows that they are bullish on
the company that they think that this is a start
smart strategy going forward. I think that's also bolstering
confidence though this report on the surface may look like
it is a weak report considering that they missed analyst
estimates, it is just very impressive to know that
they are still having that growth rate. Um,
even though they're losing users and it's not as fast
as the street was expecting and the average revenue per
user rate is growing in double digits kind of offsetting
the number of users who are leaving. So good
news for a company that's among the second tier of
digital advertising platforms, meaning it's not in the same
category as the metas and alphabets of the world,
but it does survive a does provide a very interesting
niche, especially for those who are in the e
commerce space or director consumer brands and a record year
for weddings. I know we had a guest on
earlier just a few weeks ago, seeing a record
year for weddings. So that's got to be some
good news on the big business for Pinterest and think
about even home sales. That's right. You gotta
decorate D. I. Y. That is exactly
right. Alright. Cheddar News senior reporter Michele Castelli
. Oh, Michelle, Thank you so much for
joining today.