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Caveat Emptor? Social Media Giant Pinterest Eyeing Public Offering in 2019

© AP Photo / Richard DrewWall Street
Wall Street - Sputnik International
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Popular 'visual search engine' Pinterest is planning to 'go public' in 2019, having submitted the necessary paperwork to the US Securities and Exchange Commission - US banking giants Goldman Sachs and JPMorgan Chase are named as the lead underwriters for its offering.

The company claims 250 million active users, with half outside the US — it reaped US$700 million in ad revenue in 2018. The year prior, it was valued US$12.3 billion in 2017, with a US$150 million financing. The business garnered US$700 million in, per reports, a 50 percent increase year-on-year.

Buyer Beware?

The days of the dotcom bubble are long-gone. That period of mass hysteria, in which internet companies that had never turned a profit — or even made any revenue whatsoever in some cases — and lacked workable business models were massively inflated in value by private equity capital, and given misleadingly positive ratings by Wall Street analysts, taught investors large and small a great many lessons about irrational market speculation.

A worker sweeps the floor after the closing bell of the Dow Jones at the New York Stock Exchange, March 24, 2017 in New York - Sputnik International
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However, while there's been no comparable mass sector crash in the years since, some tech company public offerings in recent years have left much to be desired.

For instance, the multi-billion dollar IPO of Snap — the parent company of Snapchat — in March 2017 was the largest in tech sector history since Facebook's. However, it's failed to meet revenue expectations, consistently making vast losses, and has been harshly punished by traders ever since. 

 

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