Please ensure Javascript is enabled for purposes of website accessibility

Why Pinterest Stock Popped Today

By Joe Tenebruso - Feb 11, 2021 at 5:35PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The social media platform could be a takeover target.

What happened

Shares of Pinterest (PINS 4.66%) climbed 7.3% on Thursday on reports that it had held talks with Microsoft (MSFT 2.76%) regarding a potential acquisition. 

So what 

Microsoft approached Pinterest about a possible deal, according to The Financial Times, though the talks are reportedly no longer active. Pinterest's stock price is up 32% so far in 2021 and 258% over the past year, which likely made it difficult for the two companies to agree on a price. Critics have slammed Microsoft for overpaying for acquisitions in the past, and the tech giant does not want to repeat those mistakes. 

A person is holding an upwardly sloping digital chart.

Microsoft was reportedly tempted by Pinterest's surging user growth. Image source: Getty Images.

Moreover, the deal would no doubt face regulatory scrutiny. Many government officials have expressed concern about the growing power of large technology companies, particularly as it relates to their ability to sway public opinion via social media. 

Now what 

It's easy to see why Microsoft would be interested in Pinterest. The popular image-sharing site added more than 100 million active users in 2020.  People have flocked to its platform during the coronavirus pandemic to find inspiration in images related to their passions. Pinterest's revenue, in turn, soared 48% year over year to $1.7 billion. 

Microsoft, meanwhile, has been on the hunt for rapidly expanding social media sites that could help fuel the growth of its Azure cloud computing service. Pinterest currently uses Amazon Web Services for its cloud infrastructure needs. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Pinterest Stock Quote
$20.45 (4.66%) $0.91
Microsoft Corporation Stock Quote
Microsoft Corporation
$273.24 (2.76%) $7.34, Inc. Stock Quote, Inc.
$2,302.93 (3.66%) $81.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.