Should I invest in Pinterests stocks
Pinterest IPO: This is what investors need to know
Another exciting IPO awaits investors in a few months, as the online pinboard site Pinterest has submitted documents for an IPO to the US Securities and Exchange Commission. As reported by the Wall Street Journal, the IPO should take place in June 2019.
Pinterest has apparently chosen Goldman Sachs and JPMorgan Chase to manage the IPO, with the social photo network aiming for a valuation of around US $ 12 billion. With the approaching IPO, Pinterest hopes to raise funds amounting to US $ 1.5 billion, according to the US media.
Many investors are now wondering how Pinterest earns its money and whether it is worth participating in the IPO or buying the Pinterest share later?
Pinterest ahead of its IPO - what investors should know about the company
Pinterest, headquartered in San Francisco, was founded in 2010 by Ben Silbermann, Paul Sciarra and Evan Sharp. Pinterest co-founder Ben Silbermann leads the company with over 500 employees as head of the company.
The Pinterest website acts as a kind of photo pin board on which users can pin pictures - so the platform acts as a de facto photo search engine. Specifically, users can discover new interior design ideas, recipes, fashion, jewelry design and much more on Pinterest.
More than 175 billion photos (pins) have already been attached to Pinterest, with the site having more than 250 million users per month.
This is how Pinterest makes its money
Pinterest primarily earns its money by placing advertisements on the website next to the photos (pins). Companies can book so-called promoted pins - these are photos or pins that companies pay for.
In addition, Pinterest has taken the first steps in the direction of e-commerce, which means that the site not only serves as an advertising, but also as a shopping platform. The automated “Shop the Look” function, which allows customers to purchase products from Pinterest partners, seems very promising. The “Shop the Look” function uses artificial intelligence (AI) to recognize objects within photos that Pinterest partners currently have in stock or on offer.
The business development of Pinterest
In the 2017 financial year, Pinterest already achieved sales of around US $ 500 million, and this number is likely to have almost doubled in 2018. Because industry insiders are assuming sales of just under US $ 1 billion in 2018.
The Pinterest business is still considered to be in deficit, but analysts expect high double-digit sales growth at Pinterest in 2020 as well.
Conclusion: With Pinterest, an interesting company is going public
Even if the conditions of the Pinterest IPO are not yet fixed, it is clear that with Pinterest, another interesting company from the social media sector will be listed on the stock exchange.
However, investors must note that Pinterest is still a comparatively young company and will continue to invest in its own growth in the next few years. If Pinterest succeeds in raising the average revenue per user - which is currently around US $ 3.0 - to the level of Twitter (US $ 7.8 / user), significantly higher ratings are possible.
Still, investors should also note that Pinterest is facing stiff competition. Pinterest competes with the offer of the Facebook subsidiary Instagram, a platform on which users can share photos. The search engine Google is also trying to cut a piece of the cake and has further optimized its image search.
Even after the IPO, Pinterest will therefore only remain a share for speculatively oriented investors who believe in increasing user numbers and thus in a higher valuation.
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