Live news updates: Pinterest leaps in after Elliott reveals himself as largest shareholder

Pinterest app is seen on smartphone
© Reuters

Shares of Pinterest soared more than 20 percent after hedge fund Elliott Investment Management revealed itself as the company’s largest shareholder and expressed support for its new chief executive.

The announcement helped offset Pinterest’s disappointing second-quarter results, reflecting a softening in the digital advertising market, which has plagued many of its social media rivals.

“Pinterest is a highly strategic business with significant growth potential, and our strong belief in the value-creating opportunity on Pinterest today has driven us to become the company’s largest investor,” Elliott said in a statement on Monday. ”

In July, the Wall Street Journal reported that Elliott had acquired a more than 9 percent stake in the company.

The Florida-based hedge fund said Pinterest’s new chief executive, Bill Ready, was the “right leader” to oversee the company’s next phase of growth. Ready joined in late June and previously headed the commerce and payments division at Google.

Shares of Pinterest rose 21.7 percent to a four-month high of $24.32 in after-hours trading on Monday.

Share prices jumped despite the company’s disappointing second-quarter results released on Monday. Pinterest revenue rose 9 percent to $665.9mn, in line with analysts’ forecasts. But spending was up 29 percent from a year ago and its net loss of $43mn in the quarter missed Wall Street’s expectations for a profit of $30mn.

Recent reports that Elliott, with his reputation as a formidable activist investor, was building up a stake in PayPal, boosted the payments company’s share price last week.

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