These 5 Social Media Stocks Are Getting Hammered

4. Pinterest, Inc. (NYSE:PINS)

Number of Hedge Fund Holders: 56

Pinterest, Inc. (NYSE:PINS) is a San Francisco, California-based image sharing and social media platform aimed at finding information on the internet through various forms of images and videos.

On July 14, the Wall Street Journal (WSJ) revealed that Elliot Management had built a stake of 9% in the company over the past several months. The hedge fund could be possibly attracted to the company because of the share price underperformance as Pinterest, Inc. (NYSE:PINS) has lost 50% of its value YTD. Furthermore, the company is facing a slowdown in user growth but operates a high-margin business, which can generate healthy cash flows in the future.

Elliot Management’s stake in Pinterest, Inc. (NYSE:PINS) provides three alternatives. First, the hedge fund can improve on streamlining the business operations. Second, the hedge fund can work with the company to find a strategic investor to expand Pinterest, Inc.’s (NYSE:PINS) operations. The third option is taking the company private, similar to how LinkedIn became private after being acquired by Microsoft Corporation (NASDAQ:MSFT).

Here’s what Harding Loevner said about Pinterest, Inc. (NYSE:PINS) in its Q1 2022 investor letter:

“Other detractors within Communication Services included Pinterest (NYSE:PINS), which is finding it hard to sustain the extremely rapid growth they enjoyed over the past two years of pandemic lockdown and social distancing.”

Overall, 56 hedge funds held a stake in Pinterest, Inc. (NYSE:PINS) at the end of the first quarter of 2022.