SAN FRANCISCO — Pinterest, the digital pin board start-up, spent years avoiding the spotlight and tamping down any hype about its growth. On Thursday, it could no longer stay out of the glare, as its shares rose 25 percent on its first day of trading as a public company.
Pinterest stock began trading at $23.75, above the initial public offering price of $19. The price put the company’s value above its last private valuation of $12 billion, avoiding a disappointing outcome.
Pinterest initially priced its shares at a level that valued it at less than $12 billion, creating potential losses for some of its later investors. But public market investors warmed to the company during its “road show” pitches ahead of its market debut, leading it to raise its share price.
Pinterest’s I.P.O. is a sign that investor demand for highly anticipated “unicorn” companies — private companies valued at more than $1 billion — remains healthy after the rocky debut of the ride-hailing company Lyft, which went public in March. Lyft shares quickly sank below their initial price. And Pinterest’s debut bodes well for the I.P.O.s of Uber, Slack and others, which are expected later this year.
Zoom, a video conferencing company that was a unicorn, also went public to high investor demand on Thursday. Shares in the company, which was last valued by private investors at $1 billion, skyrocketed 80 percent in early trading.
Unlike Pinterest, Lyft, Uber and some other companies that are going public or have gone public, Zoom is profitable. The demand for Zoom stock, and the leap in its share price, showed that investors are just as eager to back lesser-known enterprise software companies — particularly profitable ones — as they are for high-profile apps geared toward consumers. Shares in PagerDuty, a smaller software start-up that went public last week, soared 60 percent on its first day of trading.
Pinterest is closer to turning a profit than Uber and Lyft. It lost $63 million on revenue of $756 million last year, a sharp contrast to the nearly $1 billion Lyft lost and the $1.8 billion Uber lost in the same period.
Pinterest’s chief executive and co-founder, Ben Silbermann, has avoided the pizazz that has led many of his Silicon Valley peers to become minor celebrities. But as the leader of a publicly traded company, he will need to woo Wall Street investors and analysts.
Pinterest is not a social media app for interacting with celebrities or broadcasting one’s life, the company said, and is meant to be personal instead. Its 250 million monthly active users, or pinners, use the site to plan important aspects of their lives, including home projects, weddings and meals.
The focus on personal growth and planning, rather than on comments and interactions with others, has helped Pinterest sidestep the bullying, toxic behavior and disinformation that have plagued other social platforms in recent years.
But Pinterest, which makes money from advertising, faces heavy competition from those companies, including Facebook and its Instagram subsidiary. Other rivals include Allrecipes, a recipe website; Houzz, a home-improvement website; and Tastemade, a cooking content company.
As a private company, Pinterest raised $1.5 billion from investors, many of whom will reap outsize paydays. Bessemer Venture Partners, FirstMark Capital and Andreessen Horowitz, which invested in the company’s early days, will score big. Fidelity and Valiant Capital Partners also hold significant stakes.
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