Shares in Pinterest opened up 25 per cent on their first day of trading on Thursday, completing an IPO that has given many investors their first chance to back an advertising-supported consumer internet company with an audience numbering in the hundreds of millions.
The visual social media company had priced its shares the night before at $19, a 12 per cent discount to the price they sold at two years ago to private investors. The so-called “down round” highlighted the company’s relatively slow pace in generating revenue from its 250m-strong user based, compared to the previous high hopes of its early backers.
However, the company’s huge audience and revenue growth of 60 per cent has made its IPO hotly anticipated. At $23.75, its shares started trading 10 per cent above the 2017 private market price.
The opening price values Pinterest at $15.75bn, based on a fully-diluted share count — or slightly higher than the current market capitalisation of consumer messaging service Snap.