
Pinterest S-1 - samcampbell
https://www.sec.gov/Archives/edgar/data/1506293/000119312519083544/d674330ds1.htm
======
nullc
Pinterest is one of the worst things to happen to my search experience in the
last decade.

I've started wondering if they're using something like StyleGAN to general
endless image variations that exist nowhere else (and have no source or
context on pintrest) in order to pollute google image results.

~~~
Tuna-Fish
Add -site:pinterest.com to your default search.

~~~
LifeLiverTransp
Is there a goolge overlay site, that allows for auto-adding filters to the
search fottages- to await the usualy stockfootage cruft for example?

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john_moscow
I am genuinely curious, how does the year-over-year growth of 60% come
together with the pretty consistent "death curve" according to Google Trends
[0]. Could they have deliberately lowered the revenue in 2017 through some
clever accounting in order to come up with this number? As they have been
around since ~2012, are there any prior financial metrics publicly available?

[0]
[https://trends.google.com/trends/explore?date=all&geo=US&q=p...](https://trends.google.com/trends/explore?date=all&geo=US&q=pinterest)

~~~
swampthinker
Facebook has the same trend.
[https://trends.google.com/trends/explore?date=all&geo=US&q=f...](https://trends.google.com/trends/explore?date=all&geo=US&q=facebook)

~~~
babakd
Instagram doesn’t
[https://trends.google.com/trends/explore?geo=US&q=Instagram](https://trends.google.com/trends/explore?geo=US&q=Instagram)

------
pdovy
If I'm reading their MAU charts correctly, they have way more MAU outside of
the US than inside (82m vs 184m last quarter), not only that but international
user growth is relatively strong compared to the US. That said, 94% of revenue
last quarter was from the US, so they are not monetizing internationally
really at all. If they can improve international monetization then there is a
lot of room for revenue growth it would seem.

~~~
hodder
"If they can improve international monetization then there is a lot of room
for revenue growth it would seem."

A universal truth in the social network space. Unfortunately, not even FB can
really extract much value outside of North America.

~~~
majani
I think you simply fail to recognize just how far ahead North America is from
the rest of the world financially.

~~~
hodder
I pointed out the obvious failing in every major social media company to
generate revenue outside the USA. How is that me failing to recognize? I am
quite explicitly recognizing just that.

~~~
majani
It's not a failing if the global revenue is representative of the global
economy.

------
lawrenceyan
_We depend in part on internet search engines, such as Bing, Google, Yahoo!
and Yandex, to direct a significant amount of traffic to our service. For
example, when a user types a query into a search engine, we may receive
traffic and acquire new users when those search results include Pins, boards,
Pinners and other features of our service that cause the user to click on the
Pinterest result or create a Pinterest account. These actions increase Pinner
growth due to signups of new users and increase retention and engagement of
existing Pinners.

Our ability to maintain and increase the number of visitors directed to our
service from search engines is not within our control. Search engines, such as
Google, may modify their search algorithms and policies or enforce those
policies in ways that are detrimental to us, that we are not able to predict
or without prior notice. When that occurs, we expect to experience declines or
de-indexing in the organic search ranking of certain Pinterest search results,
leading to a decrease in traffic to our service, new user signups and existing
user retention and engagement. We have experienced declines in traffic and
user growth as a result of these changes in the past, and anticipate
fluctuations as a result of such actions in the future. For example, in the
first quarter of 2018, Google de-indexed our keyword landing pages, which
negatively impacted traffic and user growth in the quarters that followed. Our
ability to appeal these actions is limited, and we may not be able to revise
our search engine optimization (“SEO”) strategies to recover the loss in
traffic or user growth resulting from such actions. Changes in policies or
their enforcement may not apply in the same manner to our competitors, or our
competitors’ SEO strategies may be more successful than ours._

Seems like a horrible business to invest in when you're so utterly at the whim
of someone else you have no control over.

~~~
hazelnut
So many businesses failed before which relied on SEO. This one could go really
bad if Google pulls the plug.

~~~
creato
And I hope Google does. I curse under my breath every time an image search
comes back with Pinterest bullshit.

Google is probably petrified of fixing problems like this because the EU will
ding them for another few $billion if they do.

------
harryh
Pinterest continuing the trend of teach companies IPOing with dual class share
structures:

"Following this offering, we will have two classes of common stock: Class A
common stock and Class B common stock. The rights of the holders of Class A
common stock and Class B common stock will be identical, except with respect
to voting, conversion and transfer rights. Each share of Class A common stock
will be entitled to one vote. Each share of Class B common stock will be
entitled to 20 votes and will be convertible at any time into one share of
Class A common stock."

~~~
pseudolus
The verdict on dual class shares is not as unfavourable as is frequently made
out in the press as attested to by a recent study in the Harvard Law School
Forum on Corporate Governance and Financial Regulation:

"The limited empirical evidence on the technology and emerging growth
companies that are the target of these regulations is insufficient to support
the adoption of new regulations, as the evidence that is available indicates
that the most recent group of dual-class companies may have performed as well,
if not better, than those with a single class of stock". [0].

[0] [https://corpgov.law.harvard.edu/2018/04/15/are-dual-class-
co...](https://corpgov.law.harvard.edu/2018/04/15/are-dual-class-companies-
harmful-to-stockholders-a-preliminary-review-of-the-evidence/)

~~~
ericd
Frankly, as a long term buy and hold investor, I actually prefer to invest in
companies where the founders are solidly in control, assuming I believe in
their abilities. It seems like it should free them from some of the pressure
to optimize for the short term at the expense of long term success.

~~~
dingaling
But if they aren't predicting profits any time soon you won't be getting
dividends. And you'll only have weak voting rights with which to nudge
corporate strategy.

So, why invest at all?

~~~
ericd
Why do people pay so much for Berkshire Hathaway shares, despite their
declared intention not to pay dividends?

I trust that they still want to increase their enterprise value.

------
samcampbell
"For the year ended December 31, 2018, we generated revenue of $755.9 million,
as compared to $472.9 million for the same period in 2017, representing year-
over-year growth of 60%. For the year ended December 31, 2018, we generated a
net loss of $63.0 million and Adjusted EBITDA of $(39.0) million, as compared
to a net loss of $130.0 million and Adjusted EBITDA of $(93.0) million,
respectively, in the same period in 2017"

~~~
grivescorbett
Curious how this would change if R&D was capitalized. Of course it would just
make ebitda a less accurate proxy for cash flow but we’d still be looking at
it very differently.

~~~
samcampbell
R&D was $208M in 2017 and $252M in 2018, which was about 45% and 33% of
revenue, respectively.

~~~
grivescorbett
Thanks on my mobile. So revenue grows at 1.5x while R&D grows at 1.2x. Having
that asset on your B/S looks pretty good over a few years.

~~~
shoo
assuming that the R&D expenses largely convert into some kind of assets.

edit: is anyone able to comment how the accounting for this kind of thing
usually works?

e.g. if a company spent $1m on R&D, can it arbitrarily add a line item on its
balance sheet for around $1m of research outputs as some flavour of intangible
asset? (this is obviously not a very accurate way to account for things in
cases where the R&D failed to produce anything of utility, or produced much
less utility that the R&D cost) or are the assets produced by R&D (if any)
meant to be fairly valued in isolation from the cost to produce them?

~~~
grivescorbett
This is called capitalizing. Companies are not allowed to do it with R&D under
GAAP. But it gets tricky when one company can build a factory, call it capex,
and spread the expense over 10 years. Whereas another builds software infra
and must expense 100% immediately.

------
president
For those who don't seem to understand what Pinterest is aside from appearing
on search results in Google, it's essentially a more photo-centric version of
sub-reddits. If you're not into arts, crafts, design, or curating things, you
probably wouldn't really use it.

~~~
GordonS
I've clicked on Google results several times, but every time it asks me to
sign up or login before I've seen much of anything - eh... no.

------
OldFatCactus
I hate what Pinterest does to google image searching. Sometimes I really just
want to paste an image src in an online discussion without having to drill
into devtools.

~~~
seanwilson
How does it manage to rank so well? I'm not a user of it but whenever it
appears in searches it feels like endless popups and walled content that tries
to make you sign up. I would have thought Google would discourage links like
this.

~~~
friedman23
I think it's pretty clear that almost everyone that uses hackernews is in a
bubble and this bubble does not include people that use Pinterest.

~~~
seanwilson
True, but Google is already meant to penalise pages that have intrusive popups
so what's the difference? [https://webmasters.googleblog.com/2016/08/helping-
users-easi...](https://webmasters.googleblog.com/2016/08/helping-users-easily-
access-content-on.html)

------
sagebird
There is something junky about Pinterest and Quora— the experience of using it
while not logged in is bad. Facebook has users in a strangle hold— afraid of
alienating and being out of the loop on family affairs if they leave. Can
someone convince me that Pinterest is not suceptible to an overnight diaspora
if another service becomes more useful or fashionable? It’s great that
Pinterest is making money but how will they defend themselves? If not, perhaps
Pinterest would be a good long term short?

~~~
ceejayoz
Plenty of folks have years worth of recipes, fashion ideas, etc. saved, so
you'd need a good Pinterest-to-new-service importer, which I suspect
Pinterest's API (which is, in my experience, actively hostile to developers)
makes quite difficult.

------
gianpaj
> As of December 31, 2018, we had 1,797 full-time employees, an increase of
> 32% compared to December 31, 2017.

Why do you need so many people? A breakdown for each department would be
interesting

------
opportune
Does pinterest count impressions from google images as active/distinct user?
Wouldn't surprise me if they did that atrocious image search seo to juice up
the MAU numbers. I probably live in a bubble but nobody I know uses pinterest.

~~~
huac
"We review the number of monthly active users (“MAUs”), which we define as a
logged-in Pinterest user who visits our website or opens our mobile
application at least once during the 30-day period ending on the date of
measurement [...]"

~~~
usmannk
hah, jynx

~~~
alasdair_
I read this as “hah, lynx” and was wondering why anyone would visit pinterest
in a text-only browser.

------
h3ckr
I think they’re going to end up flat like Twitter and Snapchat in 2 years at
most. Smart to IPO now though.

------
baq
smart, taking money off the market when there's still money on the market.
that's the fourth notable S-1 in a month or so. if smart money cashing out
doesn't signal that there's real volatility ahead, I don't know what else
would.

------
wavesounds
It's weird how HN has become so negative about every recent tech companies
IPO. You would think this would be the one place on the internet where people
would be excited and positive about this sort of thing. I don't get it, is it
jealousy about missing the boat?

~~~
foobandit
There is a surge of awfully unprofitable businesses with poor business
outlooks that are going public with very large valuations.

~~~
jmtulloss
The unfortunate thing about this thread (so far) is that almost every comment
is either projecting the commenter's feeling about Pinterest or a few numbers
on the first page. So much pessimism without citing the source within the S-1
that we're all reading!

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iaabtpbtpnn
"We have incurred operating losses in the past, anticipate increasing our
operating expenses, expect to incur operating losses in the future and may
never achieve or maintain profitability."

Says it all, really.

~~~
avree
This is standard and required language by the SEC for each IPO prospectus for
companies without a clear history of profitability.

------
foobarbazetc
Surprisingly good financials here. Hmmmm.

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temp129838
I continue to be amazed that Pinterest is still a thing.

~~~
all_usernames
We can surmise your gender from this comment :-D

------
obeattie
"We currently depend on the continued services and performance of our key
personnel, including Benjamin Silbermann and others. Mr. Silbermann’s
employment, and the employment of our other key personnel, is at will, which
means they may resign or be terminated for any reason at any time."

Genuine question: is it normal for _the CEO_ of a company in the US to have no
notice period?

~~~
jbduler
To be more accurate California is an at will state (for everybody: low level
employees and CEO's) and non-compete are illegal. Other states are different.
It exists to protect the interests of employees. The flipside is if you do
resign you don't have to wait 2 months before you leave. It is good practice
though to give at least a two week notice.

~~~
obeattie
My understanding was that in At-will states, an employer-employee relationship
could be terminated without reason or notice _unless_ there is a contract in
place that says otherwise. My (naïve) presumption was that companies would
_want_ to put these kinds of contracts in place for their senior leadership.

~~~
jbduler
Those contracts are not enforceable. I guarantee you a win 100% of the time in
California.

There are several exceptions:

1) you are the CEO or a top exec in a VERY large company. In that case your
personal lawyers are involved in the negotiation of the contract, and it is
assumed that you know what you are doing. But even in those rare cases, the
law in on your side. 2) a non-compete COULD be part of the sale of your
company (I wrote YOUR company, you own it, and your are not merely an
employee, even senior employee).

Don't confuse that with the IP rights you give up to the company (legales like
like we own EVERYTHING you have created or will create). You can still quit
tomorrow with no notice given and work for whomever you feel like. Don’t use
that IP, and don’t take ANYTHING with you (no files, no customers lists, no
lines of code, no presentations, no emails). Then you are fine.

------
polote
I didn't know pinterest was a thing, I'm not sure anyone in France use it, is
that only used in the US?

~~~
colordrops
I don't know anyone in the US using Pinterest. It seems like a search engine
gaming scam to me.

~~~
jedberg
My wife uses it daily. She's a crafter and also big into using her instant
pot. Both groups use Pinterest as an online gathering place.

I used it just yesterday to get some ideas for landscaping my yard.

------
trimbo
Is there like an S-1 team that does graphic design for everyone's S-1 these
days? Lyft's S-1 has the same designs: pages of pictures of happy
people/drivers, a full page mission statement in a sans-serif font on a solid
background of color, similar page with numbers on it...

~~~
huac
that's everyone's branding, not just the S-1 :)

~~~
trimbo
Somebody in Silicon Valley needs to hire David Carson.

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sytelus
How does tech IPOs even with very poor outlook and no potential to become big
actually go through anyway? I can't imagine myself buying stock of many recent
filings but apparently tech IPOs seems to be rarely failing even though many
seem to be designed purely as VC escape hatch. So who really buys all these
stock?

------
veryworried
Anyone going to pick up stock at IPO?

~~~
sparkling
Nope. But will short after 2-3 weeks.

------
puranjay
Pinterest is basically one Google update away from having half its traffic
wiped out

------
johnwheeler
3rd most relevant brand? That’s ridiculous.

