March 3 (Reuters) - Pinterest said on Tuesday Elliott Investment Management is buying fresh equity worth $1 billion in the image-sharing platform, putting the hedge fund on track to become the company's largest shareholder.
Shares of Pinterest surged nearly 9% in premarket trading, after it also announced a new $3.5 billion share repurchase program.
Pinterest said it would use proceeds from Elliott's investment to buy back shares under the new plan.
Elliott, one of the world's most prominent activist
investors, was already Pinterest's third-largest shareholder with a 4.8% stake that was worth nearly $725 million as of December, according to data compiled by LSEG.
"We have been steadfast supporters of Pinterest since we first invested in 2022, and have strong conviction in the company's trajectory," said Marc Steinberg, partner at Elliott, who is also on Pinterest's board of directors.
Pinterest has stepped up efforts to boost user growth and capitalize on the growing adoption of artificial intelligence‑driven shopping tools. The company had 619 million users as of December end.
While the company's AI push has helped lift users to record highs, it has still struggled to persuade investors that those innovations can boost ad revenue as it faces tough competition from bigger rivals like Meta's Instagram and Facebook.
(Reporting by Deborah Sophia and Kritika Lamba in Bengaluru; Editing by Vijay Kishore and Leroy Leo)
