Shares in online scrapbook company Pinterest surged more than 28% on its first day of trading
Shares in online scrapbook company Pinterest surged more than 28% on its first day of trading, valuing the firm at about $16bn (£12bn).
The shares opened in New York at $23.75, well ahead of the $19 they were priced at, and closed at $24.40.
Pinterest’s listing is regarded as an indicator of investor appetite for “unicorns” – private, venture capital-backed firms valued at more than $1bn.
Ride-hailing firm Uber is due to float next month.
Video-conferencing firm Zoom Video Communications also made its stock market debut on the Nasdaq on Thursday.
The shares closed at $62, a rise of 72% against the initial public offering price of $36 per share.
Pinterest is a social-scrapbooking website that allows users to search for various topics, from DIY projects to travel tips, with results often showing infographics. It also allows users to create social “boards”, which relate to certain topics or themes, and encourages users to follow each other and their boards.
The company earns money through advertisements, which are placed among the “pins” or posts that users upload on the site.
Pinterest’s flotation comes before the widely-anticipated stock market debut of ride-hailing firm Uber next month.
The loss-making firm is expected to raise about $10bn and be valued at $100bn.
Uber rival Lyft was one of the first unicorns to float this year, but since listing on the Nasdaq index in March at $72 a share its stock has dropped by more than 22%.
Other firms expected to float in 2019 include home-sharing site AirBnB and WeWork, the office provider.
Losses are narrowing at Pinterest and sales are growing.
Last year pre-tax losses dropped to $62.5m compared with $181.8m two years ago. Revenue rose to $755.9m last year from $298m in 2016.
Pinterest has said that its business is heavily dependent on advertisers and a downturn in spending could harm it. It also expects to “incur operating losses in the future and may never achieve or maintain profitability”.
At its last private fundraising round in 2017 Pinterest was valued at $12bn.
The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.