Lead Plaintiff Deadline: 01/22/2021
SUMMARY OF CASE:
A securities class action has been filed against Pinterest, Inc. (PINS) on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired common shares of Pinterest stock between May 16, 2019 through November 1, 2019. This case has been filed in the USDC – N.D.CA.
The Complaint alleges that Defendants repeatedly assured the market that Pinterest was successfully expanding its domestic user base and that there existed a significant addressable market of U.S. users that served as a catalyst for its online advertising revenue. Unbeknownst to investors, however, the domestic market was quickly becoming saturated, leaving little room for future expansion or growth. This negative trend, which would ultimately impact Pinterest’s current and future financial results, was known to Defendants throughout the Class Period, yet undisclosed to the investing public.
Therefore, throughout the Class Period, Defendants made materially false and misleading statements, and failed to disclose material adverse facts about the Company’s business, operations, and financial health. Specifically, Defendants made false and/or misleading statements and failed to disclose to investors that: (i) the Company’s addressable market in the U.S. was reaching its maximum capacity; (ii) which significantly decelerated Pinterest’s future ability to monetize on U.S. average revenue per user; (iii) Pinterest was at an increased risk of losing advertising revenue; (iv) and as a result, Defendants’ public statements were materially false and misleading at all relevant times or lacked a reasonable basis and omitted material facts.
On October 31, 2019, Pinterest announced disappointing preliminary financial results for the third quarter 2019, having missed revenue estimates. Additionally, Pinterest reported net revenue $279.7 versus the consensus projection of $282 million, indicating strong deceleration in the growth of its domestic user base. The Company also gave full year 2019 guidance, which it only marginally increased, indicating further deceleration in future quarters.
On this news, the price of Pinterest common shares sharply declined by 17%, to close at $20.86, on November 1, 2019, on unusually high trading volume.