We are wading into Pinterest business waters today, talking about Pinterest stock with Maria Gallagher from The Motley Fool’s podcast Market Foolery.
We haven’t talked about this aspect of Pinterest before. Since going public in 2019, Pinterest has experienced a massive surge in popularity. When it comes to stock prices, it’s interesting to explore what those numbers mean for us as Pinterest marketers.
Introducing Maria from The Motley Fool
Maria’s job is to help people know where to put their money. After completing an undergraduate degree in psychology, she had an opportunity to complete a six-month internship at an investment firm focusing on marketing. During that time she fell in love with the stock market. Learning about how the stock market worked as well as the various companies was fascinating to Maria.
She started her personal investment journey after she graduated and started interning at The Motley Fool. She has now been working on their investment team for two years.
ESG (environment, social, and government) investing is Maria’s favorite type of investment. It’s the mindset that doing well as a company and doing good for the world can go together. Maria looks at sustainability reports to see what the companies are doing for their employees and communities. She wants to know that the company will do good for others, not just for her as a shareholder.
How has Pinterest Stock Evolved?
Understanding the Pinterest Platform
Pinterest stock had a lackluster performance immediately out of the gate in 2019. Its value began to rise in 2020 as investors began to realize just how useful the platform is and how many people utilize it.
It is also incredibly useful for advertisers. Ninety-one percent of Pinterest users say that Pinterest is a platform filled with positivity and 89% of users say that they leave the platform feeling empowered. Pinterest has promoted positivity by refusing to air political ads on its platform.
Once stock market analysts started to learn more about these aspects of the Pinterest platform, Pinterest stock value increased.
Network effects are really important for a platform like Pinterest. A Network effect is a phenomenon in which increased numbers of people or participants improve the value of a good or service.
During the pandemic, Pinterest nearly doubled their user-base. Since advertisers tend to flock to the places where more people are hanging out, Pinterest benefitted from this explosive user growth (since it generates revenue from ads).
We have seen this network effect play out with Facebook and with sites like Match.com.
As we move forward, it is super important for Pinterest to keep growing its user-base. The more users it has, the better for everyone involved on the platform.
Pinterest had 442 million users at the end of last quarter — 343 million of those users are international. The fact that such a significant portion of users are international is another aspect of Pinterest that makes it appealing to investors.
This allows the investor to see that it is a relevant platform that can span across various languages and cultures.
Factors that May Encourage Future Pinterest Stock Growth
Encouraging Regular use of the Pinterest Platform
It’s pretty hard to overstate the popularity of Pinterest. One in every three moms uses Pinterest. Over 98 million people in the United States alone use the platform.
These statistics tell us that Pinterest is close to full penetration of the US market. But it also means it can continue to grow as it reaches new audiences.
Future growth will most likely occur by encouraging users to make time on the Pinterest platform a daily part of their lives. Spending more time on the platform and making it a habit increases the amount of money spent on the platform which helps it continue to grow (and the Pinterest stock price to rise).
Providing Improved Analytics to Brands
Providing improved analytics to brands on the platform will help Pinterest as they continue to grow. If brands can easily measure their Pinterest ROI, they will be more likely to invest in Pinterest ads over other types of ads.
IT Cosmetics recently reported a 5X higher return on Pinterest advertisements compared to the return on other paid search platforms. This type of data illustrates the power of Pinterest marketing to brands (and stockholders).
Creating ways to easily measure advertising ROI will not only serve the brand, but also the user and the platform as a whole.
Staying True to Their Mission to Promote Positivity
Pinterest’s mission is to have people leave the platform feeling better than they did before they logged in. If they continue to stay true to that mission, it will benefit them (and have a positive effect on Pinterest stock) in years to come.
There’s so much debate and negativity on social media platforms. Pinterest stands apart from all of them. And that is a feature that is attractive to many users.
If you’d like to learn more about investing, check out the Market Foolery podcast and The Motley Fool. You will find tons of information great information about personal investing in general, and Pinterest stock developments!
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