Pinterest is about to go public. It has priced its shares at $19, which gives the company a value of $10 billion. That is a lot of money for a public corporation that generated almost $760 million and lost $63 million in 2018. The math is such that initial investors may hammer the stock soon after it begins to trade.
The argument for Pinterest’s value is that its growth rate was 60% last year. That adds it to a list of companies, like Twitter, that set valuations on rapid growth, relatively small losses and large numbers of users. Pinterest has over 275 million users and is growing. That puts it at about the same size as Twitter, based on that measure.
Lyft, which has lost 20% of its value since its IPO, is not a good measure of what may happen to Pinterest shares. Evidence suggests that hedge funds that took ownership in Lyft when it was private started to short the shares almost immediately. Pinterest investors may be blocked from such activity, which takes it off the table as a risk.
The most likely reason Pinterest shares will come under pressure is that they probably will surge as the stock opens. It will be too great an enticement for some investors to forgo a 20% or 30% gain on a day of trading. If the shares sell down the next day or the next, analysts will start to say the stock is overvalued, which will feed a selling frenzy.
Pinterest shares will be priced at $19, but they won’t stay there.
Travel Cards Are Getting Too Good To Ignore
Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.
We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.
It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.
We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
