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Pinterest Shuns Social-Media Label That May Help Demand for IPO

Digital bulletin-board site has a direct line to millions of people looking to buy things

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Pinterest Seeks Up to $1.28 Billion in IPO Below 2017 Private Valuation
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Pinterest Inc.’s message to investors: don’t compare us to social media or a search engine.

But as it wraps up a short roadshow and gets ready to list shares as soon as Thursday, such a comparison could help Pinterest drum up demand amid a flood of new listings this year. 

Pinterest operates in a crowded digital marketing space, where Google and Facebook Inc. get the lion’s share of ad dollars, and a smattering of smaller platforms like Twitter Inc. and Snap Inc. get the rest. The San Francisco-based startup, which serves as a sort of digital bulletin board for pictures and ideas for furniture, fashion, weddings, recipes and more, has a direct line to millions of people who are online looking for specific things to buy. That gives it an edge in making money from its user base compared with some of its peers. 

Chief Executive Officer Ben Silbermann likes to project a more virtuistic, less competitive vision of Pinterest, but investors will still be scrutinizing its advertising model when they decide whether to buy in. There are a lot of options to place bets on hot technology companies: Ride-hailing company Lyft Inc. made its debut earlier this month and IPO heavyweight Uber Technologies Inc. is likely to list its shares in May. Videoconferencing company Zoom Video Communications Inc. is pricing its shares Wednesday and will begin trading Thursday along with Pinterest. Slack Technologies Inc. and Postmates Inc. are expected to follow soon

Pinterest is seeking to raise as much as $1.28 billion, selling shares for as much as $17 apiece. At that price, the company would be valued at about $9 billion, less than the $12 billion valuation it had in its last private funding round in 2017. Zoom boosted its IPO price to as much as $35 a share.  A rare example of a profitable tech startup launching a public listing, Zoom could seek a market valuation of almost $9 billion. 

Pinterest has taken a slow and steady approach to growth and making money from the service, compared with the faster expansion rates of Facebook, Twitter, and Snap when they went public. Analysts expect revenue will likely come more from squeezing additional ad dollars from the base of users Pinterest already has, rather than growing its total audience.

Despite Pinterest’s efforts to distance itself from the label of a "social media company", analysts say it can be a useful benchmark for valuation. According to James Cordwell, an  analyst at Atlantic Equities, Pinterest is worth as much as Snap, about $16 billion, and could be much more.