What Smart Investors Know About Pinterest's $500 Million Share Repurchase Plan
On Feb. 6, image-browsing platform Pinterest (NYSE: PINS) reported financial results for the fourth quarter of 2022, showing modest revenue growth and meager net income. But there's more to a quarterly financial report than this. For Pinterest, its quarterly report included a $500 million share repurchase plan.
With a market capitalization of under $18 billion, a $500 million buyback is substantial for Pinterest. And for many companies, a buyback of this size would be a big boost for earnings per share -- one of the biggest drivers of long-term stock performance. But for Pinterest, it's unlikely to help shares go up. Here's why.
Pinterest's management is forthright about why it's using $500 million to repurchase shares. In the conference call to discuss Q4 results, new CEO Bill Ready said: "[W]e're planning to execute a stock buyback program of up to $500 million, which we plan to commence this quarter to help mitigate dilution from stock-based compensation."
Source Fool.com
