Pinterest, the picture-based social sharing website beloved among scrapbookers and gardeners everywhere, priced its long-awaited IPO at a price range of $15-$17 per share with plans to begin trading next week.
Even at the high end of that price range, the company will go public at a valuation of $11.3B — a full $1B less than its last private valuation.
Pint-sized investor interest
Pinterest has raised a whopping $1.5B from investors since it launched in 2009. During its last several funding rounds (in 2015 and 2017), Pinterest was privately valued at $12.3B.
Because Pinterest is poised to enter public markets at a valuation far lower than its most recent private valuations, some of Pinterest’s most recent private investors aren’t going to see unexpectedly low profits, but actual losses.
The runt of the unicorn litter
Pinterest’s low pricing is raising some questions about the prospects of other thin-margin companies that plan to IPO, like Airbnb, Uber, and Slack.
But undercorns don’t necessarily underperform, especially in the long run. Square went public at $2.9B — less than half its $6B private market valuation — but got the last laugh when its market cap shot to $31B.
Although Pinterest is unprofitable like peers Uber and Lyft, it is losing far less money: Last year, Lyft — whose recent IPO involved a roller-coaster drop and then recovery — lost $911.3m compared to Pinterest’s $63m.
