Pinterest is rising after reports that Elliott Management acquired 9% of the shares

Pinterest shares rose over 20% in extended trading on Thursday after The Wall Street Journal reported that Elliott Management has accumulated a stake of over 9% in the company.

Elliott, known for his activist investments, has been discussing unspecified issues with Pinterest for the past several weeks, telling the company that it is now the largest shareholder, the Journal reported, citing unnamed sources.

Prior to after-hours pop, Pinterest shares fell 75% in the past year as the company struggled on social media to retain users. While revenue grew 52% in 2021 to over $ 2.5 billion, the number of global monthly active users fell by 6% to 431 million, a worrying sign for investors worried that the app’s popularity is declining.

The Pinterest application on an Apple MacBook Air.

Guillaume Payen | SOPA pictures | LightRocket | Getty pictures

Co-founder Ben Silbermann resigned from the role of CEO in late June. His successor, Bill Ready, is a former Google trade manager, a sign that the company is ready to increase investment in developing its e-commerce business.

Elliott has some experience of getting involved in struggling online advertising companies. In 2020, Twitter reached an agreement with Elliott and Silver Lake that allocated the companies board seats and initiated a $ 2 billion share buyback program. Twitter also received a $ 1 billion investment from Silver Lake as part of the deal.

Prior to the deal, Elliott tried to remove then-CEO Jack Dorsey from his director post. Although Dorsey survived the Elliot effort, he eventually left Twitter in 2021. According to FactSet, Elliott acquired 10 million Twitter shares between early 2020 and July 2021 and still owns them all.

CNBC contacted Pinterest and Elliott Management for comment, but neither of them responded immediately.

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