10/5/2016 Update: In a move that the media is saying could be signaling Pinterest’s interest in an eventual IPO, the company named its first ever Chief Financial Officer. Todd Morganfeld is coming to Pinterest from Twitter and has also worked at Hewlett-Packard and Goldman Sachs Group. Pinterest is estimated to be valued around $11 billion dollars and it looks like 2017 – 2018 will be the earliest the company could go public. However, CEO Ben Silbermann said yesterday that the company still has no immediate IPO plans.
It looks like one of the next high profile social media companies to have an IPO could be Pinterest. Investors who are thinking ahead are trying to figure out how to buy Pinterest shares at the IPO price and if they can’t do that, should they still buy the stock when the company opens for trading the first day? Lets take a look at what has been happening so far.
Will Pinterest Be Next?
People want to buy Pinterest stock because the platform has soared in popularity and is totally different from Twitter and Facebook. That is a key: being different than the rest. Of course Pinterest needs to figure out how to make money, but that seems to be a minor stepping stone in the current world of Internet social media IPOs. Pinterest raised $225 million dollars in late 2013, another $200 million more in May 2014, and now another $367 million in March 2015. They have also said they are planning on raising another $210 million in the coming months.
All this for a visual search engine company that just started thinking about making money by showing ads on their site in September 2013. That means they are busy trying to become a viable business and the question isn’t If they will go public but when it will happen.
How To Buy Pinterest Stock
Just like the IPO’s of Alibaba, Facebook, and Twitter it will be virtually impossible for any individual investors to get in on the ground floor of a Pinterest IPO. Only those who have the right connections or have some long standing relationship with a broker will be able to get shares before the public can. That means for individual investors like you and I, buying the stock on the open market once the stock goes public will be the only option.
To do that you should plan in advance and sign up with a discount stock broker. TD Ameritrade is great for investors of any level and it is the broker I use for the portfolio on the front page of this website. With no minimum dollar requirements for opening an account, you can rest assured that your money is safe with them as TD has been in business for over 40 years. Additionally, TD Ameritrade rated #4 in the 2016 Barron’s rankings of online discount brokers.
**Signing up to any online broker is free and shouldn’t take more than 30 minutes. Once you put all your information in, you will need to put money into the account you just opened so that you are ready to buy Pinterest stock once it goes public. Of course you can also buy and sell any other stock that is on the market through your new broker account.
Don’t Buy Pinterest Stock Right Away
By the time the Pinterest IPO happens which would be sometime in 2016 or later, investors will have had ample time to see how Facebook and Twitter stock have fared. If they are both down, why would Pinterest be any different? Perhaps then it would be a sign to steer clear and not buy the stock. If you do decide to buy, be aware that buying any IPO the first day is risky and especially so for popular and highly publicized stocks like Pinterest might be.
As I right this, Facebook stock is near an all time high and Twitter stock is in big trouble, down from its IPO price. What you might learn from this is that waiting to buy might be the smart thing to do when it comes to IPO’s. Wait for the euphoria to settle down and see whether investors are still as excited about the stock in a week or a month as they were on opening day. Most of the time you can get in cheaper somewhere down the road than you can on that first day.