Social Media Backlash Leaves Pinterest Vulnerable

A big question hanging over the tech industry is how this year’s hotly anticipated IPOs will perform in the face of a tumultuous stock market. Among the expected major public offerings, one stands out as particularly vulnerable to recent market swings: Pinterest. Given the big stock slides of fellow social media companies Facebook, Twitter and Snap, the $12.3 billion valuation that Pinterest achieved in private fundraisings suddenly looks less viable on public markets.

Facebook, Twitter and Snap have each seen their stock slide by 28% or more in the last six months, as investors worried about data privacy and user growth. The decline was much steeper than losses across the broader tech sector. The three big social media companies are now valued at about seven to eight times revenue for the previous 12 months based on their market capitalization, down from 12 to 16 times revenue in mid-2018.