Shares of Pinterest (PINS) jumped over 10% at one point during extended trading hours on June 28 after the image sharing and social media giant disclosed that its co-founder and long-time CEO Ben Silbermann is stepping back from his current role to transition to Executive Chairman of the Board. However, the stock reversed those gains and is now down about 1% on the day.
The top leadership change comes at a time when the company is shifting gears from being an advertising-centric model to making e-commerce its top priority. Investors cheered the appointment of new CEO Bill Ready.
Effective today, Silbermann will be replaced by Bill Ready, who has served as President of Commerce at Google (GOOGL) since 2020. Earlier, he had also served in various senior leadership roles, including EVP and COO at PayPal (PYPL).
Departing CEO Silbermann commented, “In our next chapter, we are focused on helping Pinners buy, try and act on all the great ideas they see. Bill is a great leader for this transition. He is a builder who deeply understands commerce and payments, and he shares our passion for creating a positive corner of the Internet. I’m confident he’s going to be an outstanding CEO.”
Sharing his excitement about his new role, new CEO Bill Ready stated, “I look forward to working closely with Ben, the Board, and the rest of the leadership team to capitalize on the many opportunities ahead and usher in Pinterest’s next chapter of growth and success.”
Wall Street’s Take
Following the news, Rosenblatt Securities analyst Barton Crockett reiterated a Hold rating on Pinterest stock but did not issue a price target.
Overall, the stock has a Hold consensus rating based on five Buys and 17 Holds. The average Pinterest stock forecast of $26.85 implies 37.3% upside potential from current levels.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 81% Bullish on PINS stock compared to a sector average of 65%.
Shares of Pinterest have lost almost three-fourths of their market capitalization over the past year.
The company is working on a turnaround aiming to create a niche for itself in the e-commerce landscape. In early June, it acquired start-up firm The Yes, an AI (artificial intelligence) powered company that offers a shopping platform for fashion brands.
Ready’s experience with payments, product development, and shopping at Google will benefit Pinterest in its strategic transition to the next phase of growth. The move may work out well for the stock, as seen in the investors’ initial reaction to the news.