Why Pinterest Stock Soared Today
Shares of Pinterest (NYSE: PINS) soared on Friday after The Wall Street Journal reported that an activist investor has taken a greater than 9% stake in the company. As of 10:30 a.m. ET, Pinterest stock was up 14%.
Elliott Investment Management has taken a large stake in Pinterest and has reportedly been talking to the management team about ... something. The activist investment fund often takes large stakes in public companies and subsequently points out where management is failing, in hopes of catalyzing better returns. For example, roughly one year ago, Elliott did this with pharmaceutical company GlaxoSmithKline (GSK) and utility company Duke Energy. For what it's worth, both stocks are beating the market over the past year, although returns are merely flat compared with the market's decline.
More recently, in May, Elliott published a letter regarding computer memory company Western Digital, calling for a full strategic review. It believes that if Western Digital follows its advice, the stock could double by next year.
Source Fool.com
