Pinterest valued at $12.7 billion in IPO, sign of tech demand after Lyft struggles

By Joshua Franklin NEW YORK (Reuters) - Pinterest Inc's initial public offering set the online scrapbook company's valuation at $12.7 billion on Wednesday, above its expectations and a sign of strength for the tech IPO market after Lyft Inc's struggles.

Reuters April 18, 2019 07:05:26 IST
Pinterest valued at $12.7 billion in IPO, sign of tech demand after Lyft struggles

Pinterest valued at 127 billion in IPO sign of tech demand after Lyft struggles

By Joshua Franklin

NEW YORK (Reuters) - Pinterest Inc's initial public offering set the online scrapbook company's valuation at $12.7 billion on Wednesday, above its expectations and a sign of strength for the tech IPO market after Lyft Inc's struggles.

Pinterest, where users save ideas for clothes, décor and recipes, is due to start trading on the New York Stock Exchange on Thursday. Its performance will be a key test of the tech IPO market after the Nasdaq debut of ride-hailing start-up Lyft at the end of last month.

Lyft raised more than it had set out to do when it went public, but shares have dropped around 17 percent from its IPO price, raising concerns about bigger rival Uber Technologies Inc when it prices its IPO next month.

A key difference between Pinterest and Lyft however were their valuation expectations. Lyft, which lost $911 million last year, was seeking a valuation of up to $24.3 billion in its IPO, higher than the $15 billion valuation it attained in its latest private fundraising round in 2018. Pinterest lost $63 million in 2018.

Pinterest's initial $15-$17 per share target range target range had set it on course to be valued below its last private fundraising valuation of $12.3 billion in 2017.

At $19 per share, Pinterest, which offers advertisers a venue to sell to consumers, raised around $1.4 billion at a roughly $12.7 billion valuation.

The fact that Pinterest attained a higher valuation in the IPO will be a relief to investors who participated in prior fundraising rounds and gives some vindication to the company ahead of its public market debut on Thursday.

Pinterest is also the most high-profile listing of a U.S. social media company since Snap Inc in 2017. Snap's stock also priced well in its IPO but is now down more than 30 percent below its IPO price.

Other IPOs this year, such as cloud computing company PagerDuty Inc and jeans maker Levi Strauss & Co have also traded above their IPO prices since going public.

Investors in IPOs typically expect new companies to outperform the broader market. Renaissance Capital's IPO exchange traded fund is up 30 percent so far in 2019, compared with a 15.7 percent rise in the benchmark S&P 500 Index.

IPOs of Pinterest and other such loss-making unicorns -- startup companies with valuations of at least $1 billion -- have presented a predicament for investors sitting on the fence. They do not want to miss out on popular companies with fast growth, but at the same time have to weigh the risks of businesses with unproven economics.

Pinterest will trade under the symbol "PINS". Goldman Sachs & Co LLC, JPMorgan and Allen & Company are the lead underwriters on the Pinterest IPO.

(Reporting by Joshua Franklin in New York; Editing by Lisa Shumaker)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Gold vaults to highest since October 2012 as dollar stumbles
Business

Gold vaults to highest since October 2012 as dollar stumbles

By Diptendu Lahiri (Reuters) - Gold prices surged to their highest since October 2012 on Tuesday, driven by a weakness in the U.S. dollar and widespread monetary stimulus packages by central banks as a jump in coronavirus cases dents the economic outlook

India says it may allow some foreign flights to resume after U.S. criticism
Business

India says it may allow some foreign flights to resume after U.S. criticism

By David Shepardson WASHINGTON (Reuters) - India's ministry of civil aviation said on Tuesday it was considering allowing some international carrier flights to resume after Washington accused India of "unfair and discriminatory practices." The Indian ministry said in a statement posted on Twitter that as "we move from controlled and managed aviation evacuation of our citizens in different parts of the world and foreign nationals from India, we are now looking at the possibility of establishing bilateral arrangements." The U.S. Transportation Department issued an order Monday to require Indian air carriers to apply for authorization prior to conducting charter flights beginning in 30 days. The department sought "to restore a level playing field for U.S.

Wall Street higher on signs of recovery, Nasdaq hits record high
Business

Wall Street higher on signs of recovery, Nasdaq hits record high

By Devik Jain and Medha Singh (Reuters) - Wall Street's three major indexes rose on Tuesday as improving economic data and the prospect of more stimulus bolstered hopes of a swift recovery, while a jump in technology shares powered the Nasdaq to another record high. White House advisor Larry Kudlow said tax rebates and direct mail checks are on the table in the next coronavirus relief bill.