The owners of Pinterest appear to be taking a cautious approach to their company's IPO following Lyft's (NASDAQ:LYFT) bumpy first week as a public company.
Launching its investor roadshow today, the online image website priced shares at $15 to $17, significantly below its last funding round, which sold stock at $21.54 and gave Pinterest a valuation of $12B.
The firm is set to begin trading on the NYSE next week under symbol "PINS" as part of a wave of high-profile but unprofitable tech startups that are now moving toward the public market.
Ben Silbermann, chief executive of Pinterest, at the company’s San Francisco office in August.
How Lyft and Pinterest perform in their public debuts will be critical in the lead-up to the public offering of Uber, the largest of this generation of tech start-ups. Uber is expected to go public in the next few months at a valuation of around $120 billion, in what would be the biggest offering by an American company.
Several other smaller companies are planning public offerings, including Zoom, a video conferencing company; PagerDuty, a software company; and Slack, an office communications company.
Pinterest, which makes digital pin boards that allow people to save images and links from around the web, has traditionally been conservative in its spending and approach to growth. Its chief executive, Ben Silbermann, built Pinterest slowly and steadily. “Pinners,” as users are known, use Pinterest today to create collagelike mood boards on topics such as food, events and hobbies.
Mr. Silbermann’s approach has contrasted with those of other entrepreneurs who lead companies known as “unicorns,” which are valued at more than $1 billion by private investors. Such companies have typically prioritized fast growth over profits and take many years to go public. Unicorns that sell or go public below their last private valuation are known as “undercorns.”
Like its peers, Pinterest loses money. But the company, which generates revenue from advertising, is burning less cash than Lyft or Uber. Last month, Pinterest revealed it lost $63 million on revenue of $756 million in 2018. Pinterest is also growing quickly, reporting a 60 percent jump in revenue between 2017 and 2018.
