What’s going on?

Pinterest reported disappointing 2Q results.

What does this mean?

• Pinterest’s revenue and profit missed forecasts, and why it gave a worse-than-expected revenue outlook for this quarter too.
• Pinterest lost 5% of its monthly active users yoy in 2Q 2022, accumulated by
  • accelerating competition from TikTok, and
  • a traffic-disrupting change in Google’s search algorithm.
• Advertisers (Pinterest’s revenue source), therefore, gradually leave Pinterest over increasing worry about shrinking consumer demand and thus fewer users to target.

Why should I care?

The bigger picture: Some still believe

• Elliott Management (an activist investor) revealed that it had become Pinterest’s biggest investor, implying that Pinterest is going in the right direction.
• The news might have meant something to investors: they sent Pinterest’s shares up 20% afterwards.

Zooming out: Bright future ahead

• Some “right” directions that Elliott might have seen potential in:
  Pinterest intends to:
  • personalize the customer experience using AI;
  • make it easier for advertisers and retailers to sell on the site.
  • appoint a new CEO who has advanced at Alphabet and PayPal.

Content source: Finimize (2022) Unpinned. Available at: https://www.finimize.com/wp/news/unpinned/ [Accessed on Aug 05, 2022]