Pinterest stock jumps more than 20% after earnings miss, Elliott confirms stake and users stick around

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Pinterest shares surged in extended trading after the initial reports on Elliott buying in, as investors bet on the activist forcing change at the company, or potentially reviving reported merger talks with PayPal.

Pinterest Inc. missed expectations for earnings and guided for revenue lower than analysts expected in the current quarter, but shares still spiked in after-hours trading as users stuck around in a quarter that led to sudden change and attracted an activist investor.

Just as the quarter was about to end, co-founder Ben Silbermann stepped down as chief executive and was replaced by Bill Ready, a former Alphabet Inc. GOOGL, -1.26% GOOG, -0.99% and PayPal Inc. PYPL, +2.35% executive who has long been focused on e-commerce.

“We’ve had a very collaborative and engaged dialogue with Elliott recently,” Ready said on a conference call Monday. “They’re aligned with our vision of what Pinterest can become are supportive of our team and our efforts, and see the same tremendous potential for long term value creation that I do.”

For the third quarter, executives guided for revenue to “grow mid-single digits on a year-over-year percentage basis” in the third quarter. Analysts on average expected third-quarter adjusted earnings of 16 cents a share on sales of $710 million, according to FactSet, which would equal 12% revenue growth from the year before.

Chief Financial Officer Todd Morganfeld was more specific, saying “We will be even more strategic and selective in our hiring plans for the remainder of 2022,” while adding caution to Pinterest’s revenue guidance and warning that user growth could be slight the rest of the year.

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Elliot buying Suncor , PayPal then Pinterest......

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