Pinterest confidentially files for an IPO and how Instagram may be aiming to compete

It is Monday, February 25, 2019. In case you forgot.
On Thursday, the Wall Street Journal reported that Pinterest had confidentially filed for an IPO, shooting for a late June listing. 

If it’s so confidential, why am I reading about it?
Our thoughts exactly. With a confidential filing, companies are permitted to file for an IPO without publicly sharing sensitive financial information (for competitors, customers, and employees to scrutinize) until much closer to the listing date.

But despite confidential filings, the press inevitably gets ahold of the story --  in some cases, the company announces the filing itself (see Slack’s press release).

Why would they do that?
Media coverage about the filing generates buzz that can help attract talent, investors, or potential acquirers ahead of the IPO. Companies get to cause a stir while keeping any financial liabilities close to the chest -- it’s a win-win.  

Back to Pinterest’s not-so-confidential IPO plans.  

Pinterest was valued at $12 billion following its most recent funding round in 2017 and the IPO valuation is expected to be similar.

Is Pinterest really a $12 billion company? Who knows, but here’s why some investors think so:  

Pinterest is not only more popular than Twitter among US adults, 40% of its 250 million users have an income over $100,000 -- that’s a really good thing if your revenue is entirely dependent on advertising.  

Advertisers spent about $1 billion on the company’s Promoted Pins ad product in 2018 -- twice what they spent in the year prior.

Not to steal your thunder but...
On the same day that Pinterest’s IPO plans were published, TechCrunch reported that Instagram has code written for a feature that would make it a direct Pinterest competitor.

History Lesson: This isn’t even the first time Instagram has pulled this move. Six months before Snap’s IPO, Instagram introduced its Snapchat-copycat Stories feature. Within about a year, Instagram’s feature was twice as popular as Snap’s.

It’s unclear if and when Instagram would roll out its new feature, but given their track record Pinterest should be ready for battle.
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Yours truly,
Zac Cherin
Brendan Uyeshiro
Brendan Uyeshiro