The Pinterest board dumped CEO and co-founder Ben Silbermann in favor of a Google executive Bill Ready. Ready has been given a turnaround opportunity that cannot happen. The board stayed with Silbermann far too long.
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In the past year, Pinterest shares have a 52-week high of $81.77 and a low of $16.14. The shares currently trade near $20. Pinterest has been one of the bombs of the already terrible tech sell-off.
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For a “hot” tech company, Pinterest has turned in extremely poor results. In the most recent quarter, revenue rose only 18% year over year to $575 million, and the company lost $5 million. Worse, “Global Monthly Active Users (MAUs) decreased 9% year over year to 433 million.” The decline was worst in the core U.S. and Canada markets. As a rule, social media companies are best measured by their user size and growth.
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Second-quarter revenue is only expected to grow 11% year over year.
The Pinterest management problem is a classic example of a board that thinks a founder can turn around a company. After more than a decade as CEO, Silbermann is a new case of how poor that assumption is.
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Ready’s efforts are already going to be difficult. The question is, will it be impossible for them to work at all.
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