📌 Pinterest: Aiming At Instagram?

Tesla Rips. Facebook has a Massive Data Breach

Hey Global Investor, here’s what you need to know before the US markets open.

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📌 Pinterest: Aiming At Instagram?

Pinterest Inc (PINS) is in talks to acquire Visual Supply Company, the maker of photo-editing and sharing platform, VSCO. If the deal goes through, that will pit Pinterest squarely against Instagram (FB). (Tweet This)

Background: Founded in 2009, Pinterest is a platform to discover, save and share information in the form of pictures, videos, and GIFs. The company has fostered a creative community that engages with art, cooking, and decor. Pinterest’s unique and growing user base has made it the 14th largest platform in the world as of today. The company went public in 2019 and currently has a market value of $48.85B.

Pinterest greatly benefited from the pandemic, adding 120M monthly active users (MAUs) to a total of 450M users in 2020. The company’s market value grew about eight times in 2020, with its shares touching a high watermark of $91 in February 2021. Pinterest brings $1.57 in average revenue per user (ARPU) up 29% in 2020, compared to Facebook’s ARPU of $7.89.

Therefore not surprising that Microsoft (MSFT) tried to acquire Pinterest a couple of months back for $51B. However, with Pinterest choosing to remain an independent company, the talk of any acquisition has faded. With continued growth, the revenue is projected to increase by 48% in 2021 and 35% in 2022. Adding an Instagram-like experience with all the accouterments that go with a social media platform may only make the company even more valuable.

What Happened?: Pinterest’s interest in VSCO is logical, as both platforms use pictures as the primary form of media. VSCO is similar to Instagram, with more focus on editing. It is valued at $550M and has over 100M registered users as of 2021. If successful, this will be Pinterest’s 17th acquisition, after acquiring search engine Jelly in 2017.

The main benefit for Pinterest may lie in social networking, chasing Instagram’s unrivaled dominance. Instagram’s success is primarily due to its ability to steal or rip features off from other platforms. Instagram has stolen the idea of ”Stories” from Snapchat (SNAP), IGTV from Youtube (GOOG), and recently ”Reels” from Tik Tok.

Pinterest’s USP is that it is a virtual search engine, displaying information only in pictures. On Pinterest, people connect over information, unlike other social platforms that are centered around connectivity. With VSCO, Pinterest can have a social add-on on top of its existing set of offerings.

If Pinterest does take this route, it will be pulling an Instagram on Instagram. Will that be a bit too much karma to handle for Facebook? As they say, what goes around comes around!

Market reaction: PINS closed the day at $77.73, up 5.00%.

Company Snapshot 📈

PINS $77.73 +3.70 (+5.00%)

Analyst Ratings (29 Analysts) BUY 55%   HOLD 41%   SELL 3%

Newsworthy 📰

Trucking: GM unveils electric Hummer SUV topping $110,000 (GM +0.59%)

Leaked: Personal data for 533 million Facebook users leaks on the web (FB +1.40%)

Electrifying: Tesla’s first-quarter deliveries break previous record, beat expectations (TSLA -0.93%)


Later Today 🕒

  • 6:00 PM IST: Initial jobless claims
  • 7:30 PM IST: ISM manufacturing index

Fun Fact of The Day 🌞

Peanuts aren’t technically nuts.

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