META - Pinterest pops 15% as advertising stocks look to end the week positive

Pinterest ( NYSE: PINS ) shares rose more than 15% as digital advertising and social media companies looked to end the week on a positive note.

Late on Thursday, it was reported that activist hedge fund Elliott Management had taken a 9% stake in Pinterest ( PINS ), though analysts were quick to downplay the prospects of short-term changes at the social media company.

KeyBanc Capital Markets analyst Justin Patterson said Elliott was likely attracted to Pinterest ( PINS ) for multiple reasons, including a weak share price, "stagnant user growth," the fact it has "intrinsically" high margins and can generate "meaningful" free cash flow and the fact operating expenditures for 2022 are outpacing revenue growth.

"While it is unclear if M&A is back on the table, we believe it is highly likely that Elliott pushes for a review of the executive team (ex-new CEO Bill Ready) and strategy, and advocates for greater expense discipline and share repurchases," Patterson wrote in a note to clients. The analyst added that the initial pop in the share price "could moderate" as investors await more details.

Several other advertising and social media related stocks rose on back of the report, including Snap ( NYSE: SNAP ), which gained more than 4.5%, as investment firm Monness, Crespi, Hardt said the company is likely to see "healthy" daily active user growth in the second-quarter.

Other social networking-related stocks also rose on Friday, including a 4% and 1% gain for Meta Platforms ( META ) and Alphabet ( NASDAQ: GOOG ) ( GOOGL ).

Several other advertising-related stocks also rose on Friday, including 3.5% gains for Comcast ( CMSA ) and The Trade Desk ( TTD ), while Netflix ( NASDAQ: NFLX ), which recently said it was partnering with Microsoft ( MSFT ), rose nearly 7%.

Investment firm UBS said on Friday that it is expecting Netflix ( NFLX ), which reports second-quarter results next week, to lose slightly more than 2M subscribers.

Earlier this week, investment firm Morgan Stanley noted that Pinterest ( PINS ) saw a 9% decline year-over-year in total time spent during the second-quarter, which the firm said was the "smallest amount of minutes since 2017."

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