7/27/2014 Update: There is still no news that Pinterest is planning or is interested in having an IPO in 2014. If there ever is one it will probably take place in 2015.
It looks like the next high profile social media company to have an IPO will probably 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 and they just raised another $200 million more in May 2014. To date they have raised about $764 million dollars.
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 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. I use and recommend TD Ameritrade and you can read my review here – TD Ameritrade. They are a great online broker for investors of all levels, including beginners. What you will need to do is go to the TD Ameritrade website (or choose another reputable online broker), and sign up. Its not hard and shouldn’t take you more than 15 to 30 minutes.
After that 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 buy and sell any other stock as well through your new broker account. To learn more about how to open a discount broker account please read how I did it by clicking the link.
Don’t Buy Pinterest Stock Right Away
By the time the Pinterest IPO happens which would be late 2014 or 2015, 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 is at an all time high (after being down for months and then finally taking off) and Twitter is still below 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.