Pinterest shares rose sharply after a $1 billion investment by activist fund Elliott Investment / Photo: Michael Vi / Shutterstock.com
Shares of image and idea search service Pinterest rose 9.3% on Tuesday, March 3, despite a broad market sell-off, after the company announced a $1 billion strategic investment by activist fund Elliott Investment. The deal was arranged through a bond purchase at a 30% premium relative to the closing price on March 2.
The photo host said it plans to use the proceeds for a new $3.5 billion accelerated share repurchase program. The buyback represents nearly a third of Pinterest's market value and will significantly reduce the number of securities outstanding, Reuters notes.
Elliott has been investing in Pinterest since 2022. Then the fund acquired more than 9% of the company's shares and since then remains among its major shareholders, notes Barron's. According to Reuters, after the new deal, the hedge fund may become the largest holder of the platform's securities.
Pinterest previously said it was working with Elliott to increase user engagement, improve monetization and "create a personalized experience" on the site, Barron's recalls. In a March 3 release, the fund said it sees "significant growth opportunities" for the company.
What makes Elliott's investments noteworthy
Elliott Investment Management manages more than $79 billion in assets and is known for actively fighting for change in companies whose stakes it acquires. One notable example is that in 2024, Elliott was able to win five seats on the board of Southwest Airlines and achieve a transformation of the business, after which the stock rose 90%.
In November, the activist investor became a major shareholder in Barrick Gold, the second-largest gold miner, and pushed for a split of the company. And on February 17, he bought a large stake in cruise carrier Norwegian, presenting a plan to get it out of crisis.
In addition, Elliott owns a 5% stake in automobile giant Toyota and opposes taking the company public.
What's going on with Pinterest
Pinterest is struggling with slowing growth and large retailers cutting back on advertising spending caused by duties. It is from advertising that the service gets almost all of its revenue, Barron's points out.
Last month, the company's shares plunged to the start of the 2020 coronavirus pandemic after weak results and outlook disappointed investors. Evercore analysts warned at the time that Pinterest was under pressure from growing competition from Google, Meta and possibly Reddit. The situation is likely to get even tougher this year and next with the return of TikTok to the U.S. and the launch of ChatGPT ads, Evercore expects.
Instagram and Facebook have a strong foothold in the online advertising market, with major advertisers cutting spending on Pinterest just as artificial intelligence tools threaten to upend the entire industry, Reuters notes. Pinterest itself announced in January that it would reallocate resources in favor of developing AI-based products, for which the company cut 15% of its staff.
Pinterest shares have lost almost half of their value over the past year, and since the beginning of 2026 - more than a quarter. At the same time, if a month ago there were 31 analysts who recommended the company's securities to buy, now there are 23 such analysts left, according to MarketWatch data . Many gave up the "bullish" position after the last report. The number of neutral ratings assigned to Pinterest increased from ten to 19. Only one analyst is advising selling this stock now, as he did last month.
This article was AI-translated and verified by a human editor
