Pinterest sets IPO price range below last valuation

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Lyft, Pinterest plan IPO this year

MarketWatch San Francisco Bureau Chief Jeremy Owens on Lyft and Pinterest’s plans to go public and the state of the IPO market.

Pinterest Inc. set a price range of $15 to $17 for its initial public offering, a range that is below where it last raised money privately, as the image-search company is set to begin its roadshow to pitch the shares to investors Monday.

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The company said it plans to sell up to 75 million shares in the IPO, which at the midpoint of the price range, would raise roughly $1.2 billion.

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Pinterest last sold shares to pre-IPO investors in 2017 at a price of $21.54 each, valuing the company at roughly $12 billion. At the proposed price range, Pinterest would be valued below that level.

The Wall Street Journal reported earlier that Pinterest's IPO price range would fall below where it last raised money privately.

There is no guarantee that IPO shares will ultimately be priced within the initial range, and underwriters typically seek to set conservative expectations with the hope that they can exceed them when the shares are sold. Pinterest's shares are expected to start trading next week on the New York Stock Exchange under the symbol PINS.

Lyft Inc., which had been closely watched as a barometer for highly valued technology companies entering the public domain, stumbled somewhat after its recent debut and that may have contributed to Pinterest's decision to take a conservative tack. The ride-hailing company priced its IPO in late March above its initial range, which was well above its last private valuation. Yet after closing up on the first day of trading, the shares stumbled, though they have since rebounded and are trading back above the company's $72 IPO price.

Pinterest's listing will be the next big test. After that, Uber Technologies Inc. is expected to stage the biggest offering of the year -- and one of the largest IPOs on record -- as soon as May.

Last month Pinterest sped up its IPO timing as it looks to tap into a hot market for new issues. The broader stock market has been climbing this year and volatility has been low, an ideal backdrop for new issues. This year is expected to be one of the best ever for IPOs, assuming the current conditions persist.

Like many founder-led technology companies, Pinterest will debut with a dual-class structure that gives existing investors 20 votes per share compared with public investors, who will be entitled to one vote per share.

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Pinterest, which launched in 2010, has said it reaches more than 250 million monthly active users. Its users visit the site to browse through billions of images on topics ranging from living-room furniture to dinner recipes and tattoos. It generates revenue from ads scattered across its site.

Pinterest has reported sharp revenue growth and narrowing losses. Its revenue for 2018 totaled $756 million, up from $472.9 million a year earlier. The company's net loss narrowed to $63 million from $130 million in 2017.