Pinterest, the social media platform that allows users to discover and save ideas for various projects, has seen its stock price soar to a one-year high earlier this month, as analysts expect a strong recovery in its advertising revenue. However, some of the company’s insiders have decided to sell their shares at this opportune moment, raising questions about their confidence in the future growth of the business.
Co-Founder and Director Evan Sharp Sells 166,239 Shares
According to a Securities and Exchange Commission filing, Evan Sharp, who co-founded Pinterest in 2010 and serves as a director and chief design and creative officer, sold 166,239 shares on July 18 for $5.1 million at an average price of $30.70 a share. This was the largest sale by Sharp in the past year, and it came just a few days after the stock reached a 52-week high of $30.86 on July 14.
Other Executives and Directors Also Sell Shares
Sharp was not the only insider who took advantage of the recent rally in Pinterest’s stock. Naveen Gavini, who is leaving as senior vice president of products in October, sold 52,189 shares for $1.59 million, an average price of $30.55 a share. Gavini still owns 1.1 million shares directly and indirectly.
Director Jeffrey Jordan sold 2,500 shares for $76,750, an average price of $30.70 a share. Jordan still owns 17,500 shares directly1. Director Gokul Rajaram sold 1,934 shares for $58,871, an average price of $30.44 a share. Rajaram still owns 11,066 shares directly.
Pinterest’s Stock Performance and Outlook
Pinterest’s stock has gained 45% in the past 12 months, outperforming the S&P 500 index, which rose 35% in the same period. The company has benefited from the increased online activity and engagement during the pandemic, as more people turned to its platform for inspiration and entertainment.
The company reported strong results for the first quarter of 2023, with revenue growing 78% year-over-year to $485 million and monthly active users increasing 30% to 478 million. The company also raised its full-year revenue guidance to reflect the improved outlook for its advertising business.
However, the company also warned that it expects user growth to slow down or decline in some markets as pandemic restrictions ease and people spend less time online. The company also faces competition from other social media platforms such as Facebook, Instagram, TikTok, and Snapchat, which are also vying for users’ attention and advertisers’ budgets.
Analysts are generally optimistic about Pinterest’s prospects, with an average price target of $34.64, implying a 13% upside from the current level. The percentage of analysts with buy or equivalent ratings is at 45%, up from 39% at the end of May.