On Monday, Activist investor Elliott Investment Management disclosed that it had become Pinterest Inc’s largest shareholder, backing the digital board company’s management and sending its shares up 21%.

Pinterest has “enormous growth potential,” which has led to Elliott becoming its largest shareholder, Elliott managing partner Jesse Cohn and senior portfolio manager Marc Steinberg said in a statement.

Elliott did not disclose its stake in Pinterest. However, the Wall Street Journal reported in July that the investment firm’s stake had increased by more than 9%.

Elliott has also been increasing his stake in PayPal Holdings Inc after buying stakes in companies including eBay Inc, Twitter Inc and AT&T Inc, according to Bloomberg.

Shares of Pinterest rose to $24.36 after the close on Monday, still well below the all-time high of $89.90 set in February 2021, when people stayed at home during the pandemic and flocked to the company for project inspiration.

Elliott’s statement came as Pinterest reported lower-than-expected profits due to higher costs and fewer time users spent on its platform.

Like its peers, Pinterest has suffered as advertisers cut budgets in response to rising costs and recession fears.
Finance Chief Todd Morgenfeld said the company saw weakness among advertisers in the consumer-packaged goods category, large retailers and mid-market advertisers, adding that the digital advertising environment would continue to be challenging.

The company said it expects revenue to grow by a mid-single-digit percentage this quarter, driven by a stronger dollar.