Zoom zipped in an stole Pinterest's IPO thunder, and here's why.
Pinterest Inc. should have been the story on Thursday. It had the name that consumers knew, the eight-figure private valuation and a co-founder who has been a Silicon Valley superstar since the service first hit the internet.
While Pinterest had name recognition in its favor, that paled versus the higher growth rate of Zoom, and the history of trouble for social-media companies on Wall Street did not help. Zoom also had the one thing that no tech unicorn had previously brought to market: Profits. In addition, Pinterest appears to be facing an issue similar to Snap Inc. SNAP, -0.68% when it went public in 2017, with monthly-active-user growth rates that are gradually slowing. In the fourth quarter of 2018, Pinterest’s monthly active users grew to 265 million, up 22.7%; in the third quarter they grew 23%, in the second quarter 24.8% and in the first quarter of last year, MAUs grew 36.6%, on a year-over-year basis.
Zoom also had a higher growth rate than Pinterest. Zoom’s revenue soared 118% to $330.5 million in its most recent fiscal year, making it a huge appeal to growth investors who have felt that they have missed the biggest growth phases of the latest IPOs. Pinterest had a bigger annual revenue total at $756 million, but the 60% increase from the year before lagged Zoom’s staggering performance.
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