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Why Pinterest Stock Was Falling Today

By Brett Schafer – Aug 19, 2021 at 3:47PM

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The stock took a tumble on no news from the company.

What happened

Shares of the social media stock Pinterest (PINS -0.16%) were down on Thursday, marking a second consecutive day of the stock dropping. As of 2:56 p.m. EDT, the stock is down 3.5% on the day and is now down over 7% just this week. 

So what

The recent fall in Pinterest stock comes after the company reported a disappointing second-quarter earnings result. Revenue and earnings came in strong, with both numbers beating analyst expectations, but monthly active users (MAUs) missed badly, growing only 9% in the period to 454 million. Analysts were expecting 482 million MAUs for the quarter.

A person holding an avocado and taking a photo of it.

Image source: Getty Images.

Investors and analysts were speculating that Pinterest's slowdown could have been due to world economies reopening in the quarter. Pinterest management even mentioned it on the investor conference call, stating that the tailwind it got from the pandemic has now turned into a headwind. This could create some uncertainty about the company's growth going forward, which investors were likely not happy about.

Now what

Pinterest stock is down almost 25% in the past month, but zooming out, the stock is up over 100% since its IPO in 2019. This should give some perspective to long-term shareholders. There is always the risk of Pinterest's business deteriorating, and the stock can always fall further, but if you are bullish on the social media platform's growth prospects, there's no reason to be worried about short-term volatility with the stock price.

Brett Schafer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Pinterest. The Motley Fool has a disclosure policy.

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