What Caused Pinterest Stock to Drop 13% This Week?
What happened
Pinterest (PINS, 3.03 percent) stock was under pressure this week along with the rest of the market as it neared the end of the worst first half of the year for stocks in more than 50 years. To recap, the S&P 500 fell 2.2 percent, the Nasdaq Composite fell 3.6 percent, and social media stocks fell 13 percent last week..jpeg "What Caused Pinterest Stock to Drop 13% This Week?")
Pinterest's value decreased by 50% in the first half of 2022. The S & P 500 and Nasdaq Composite have decreased by 21% and 27%, respectively, as investors consider the slowing economy, the possibility of a recession, inflation, and the aggressive interest rate increases being made by the US Federal Reserve in an effort to rein in the inflation of commodity prices.
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As a result
Pinterest gave investors a head fake during the past week. According to the announcement, Ben Silbermann, the company's co-founder and CEO, has been named executive chairman instead of CEO. The appointment of Bill Ready as the new CEO will bring in a new perspective.
When the news was announced on Tuesday afternoon, the stock rose for a brief period of time before starting to decline.
So what?
The good news is that Ready's appointment as CEO probably didn't lead to Pinterest shares declining. Due to current economic conditions, Pinterest and other high-growth stocks are simply out of favor. Even the powerful social media guru Meta Platforms (ahem, Facebook) has plans to reduce its employees as it prepares for a possible period of hardship.
In fact, as the faltering early pandemic winner seeks to re-engage users through new e-commerce services, Ready appears to be a solid long-term fit for Pinterest. At Alphabet's Google, Ready served as president of commerce, payments, and the next billion users. He was also a former executive at PayPal.
The new CEO arrangement went into effect on June 29, but this story will likely continue over the course of the next year or so as Ready implements his objectives for the social media industry.