London, UK, 3rd August 2021, ZEXPRWIRE – Pinterest has been a huge hit with social media users since it launched in 2010, and now it’s publicly traded. But after its stock price plummeted 13% following its IPO last year, the company announced that user growth would be lower than expected this year.
Green Tower Investments broker says that the company had been projected to grow by 25% but instead only grew by 3%. Pins are expensive for businesses to buy, and Pinterest is planning on investing more aggressively in advertising which could lead to higher costs for users or fewer features.
The stock plummeting impacts Pinterest users
The stock plummeting impacts Pinterest users because pins are expensive for businesses to buy. With increased advertising, consumers may be charged fees or have fewer features such as banner ads.
“More ads will make it harder to use Pinterest,” says Johnathan Asadi, a website user.
The stock plummeting impacts Pinterest users because businesses mightn’t pay for their advertising costs and may have to stop using the website. An example of this is Fortune 500 company LVMH Moet Hennessy Louis Vuitton SE which stopped using the website and chose to advertise on Facebook instead even though people usually use Pinterest to buy luxury items.
After Pinterest stopped allowing users to make money from the site, many people left, and some now only use Facebook or Instagram. The stock plummeting impacts Pinterest users because it may force them to leave as well.
“I’m so used to using Instagram that I almost forgot about this website,” said a former pinner who is now an active user of the social media site owned by Facebook.
Pinterest’s stock has dropped 50% in 3 months which is a huge hit for any company. People will stop using Pinterest because they’ll fear that more companies will leave and not want to be advertised anymore. Overall, there are a lot of reasons why many people might stop using Pinterest.
Why the stock plummeted in the first place
Pinterest was hit by revenue pressure. There have been many factors contributing to the stock plummeting, which includes a common phenomenon in high tech startups, where companies’ unit economics don’t live up to initial projections.
Pinterest has to deal with its own missteps.
The company raised $367 million from venture capital firms last year at a valuation of $11 billion, and the stock began trading in March at around $19 per share. It was priced on February 9th, 2018, for its public debut at $19 per share but plunged to $11 per share on its first day of trading, a drop of nearly 50%.
On April 17th, 2018, Pinterest’s stock price dropped 15% in one day to $6.50 after the company reported revenue that fell short of analysts’ expectations while offering a gloomy revenue forecast for the rest of this year and next. The company reported earnings per share of 17 cents on $396 million for the first quarter.
In April, CEO Ben Silbermann said that revenue was too high to start charging advertisers and might have to wait until 2019 to begin charging businesses.
Pinterest’s stock plummeted initially because it expected a higher user growth rate than what was actually reported in its first quarter.
The company said it now expected revenue for the rest of this year to be between $850 million and $865 million. It had previously predicted as much as $935 million. The company also cut its 2018 forecast, saying it would bring in between $1.4 billion and $1.5 billion, down from a range of $1.5 billion to $1.6 billion.
Why this could be a problem for users, businesses, or both
The stock plummeting impacts Pinterest users because it could result in higher costs for them or fewer features. This is a problem for consumers because it makes it harder to use the site. It’s also a problem for businesses that might not pay for their advertising and may have to stop using the website. It’s hard to tell whether this will be more of a problem for consumers or businesses, but either way, there are plenty of drawbacks.
The company is likely to focus more on advertising to reach its investors’ goals. The costs for companies may go up, and they could have fewer features if they do not want anyone to use the site anymore.
“We are going to invest a lot more aggressively in marketing,” said Silbermann. “There will be a lot of noise in the market about Pinterest.”
If people leave Pinterest because there is too much advertising or the costs go up, it could result in businesses no longer being able to advertise on Pinterest and thus stop using the site.
This would be problematic for both users and businesses, but particularly a problem for consumers since they will have a harder time using the website. Companies that would like to use the site will also be impacted since they might not afford it anymore.
The stock plummeting impacts Pinterest users because it could result in higher costs for them or fewer features. This is a problem for consumers because it makes it harder to use the site. It’s also a problem for businesses that might not pay for their advertising and may have to stop using the website. Either way, there are plenty of drawbacks that should be considered before deciding if you want to continue using this social media platform as your marketing channel.
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