Pinterest prices IPO at US$19 a share, above target range

Social network sharing app Pinterest on Wednesday said it has raised US$1.43 billion in its initial public offering (IPO), pricing its offering at US$19 per share. The pricing which was above its target price, has helped it fetch a valuation of US$12.66 billion.

Last week Pinterest pegged its IPO price range below its private market valuation, offering 75 million shares for US$15 to US$17 a share, which on a higher range, would price the firm at a valuation of US$11.3 billion.

The new sum would make the firm close to its potential private market valuation of US$12.3 billion last priced by investors in 2017.

Pinterest is due to start trading on the New York Stock Exchange on Thursday under the symbol PINS. The lead underwriters on the IPO are Goldman Sachs, JPMorgan Chase and Allen & Co.

Pinterest IPO the next indicator on Wall Street demand for tech IPO market this year

Tech companies about to go public have been moderating their expectations after witnessing ride-hailing firm Lyft's stock taking a dump after it priced its IPO at the top end of its range at US$72 apiece.

Hype around Lyft’s stock was short-lived after its IPO was priced on the top end of its price range last month, which assigned it a valuation of US$24 billion in an offering that raised US$2.34 billion.

On Monday, Lyft's stock tumbled 22% lower than its offer value barely half a month on the Nasdaq, at US$56.11. The stock pared back some losses by Wednesday, gaining 5.80% or US$3.26, to close at US$59.51.

The pricing decision from Pinterest was influenced by Lyft’s IPO, as well as a slowing growth in the US, said experts. The conservative pricing was to avoid a situation like Lyft.

The difference for a tech company like Pinterest compared to Lyft will be in its growth performance, as its losses have shrunk from a year ago unlike Lyft, which is a scenario that is likely to sit better with Wall Street.

For 2018, Pinterest said it hit about US$756 million in revenue from online advertisements, a 60% growth rate that accelerated from the previous year. The firm’s net loss shrank from US$130 million in 2017 to US$63 million last year.

Pinterest was launched around 2011, and it allows users to save images and links from websites on digital pin boards. The collage mood boards are often pinned based on themes from the users, on topics like food, hobbies, and wedding.

Pinterest says 265 million users go on its platform at least once a month.