Shares of Pinterest closed 28.58% higher than the IPO price on the first day of trading, giving the image-sharing site a $12.83 billion valuation.
The rise marked a strong debut for the company, though the valuation just tops the $12.3 billion valuation the company had when it last raised venture capital in 2017.
Still, the positive reception continues the warm fuzzies between tech and Wall Street. Ride-hailing startup Lyft had a fast start last month, when its IPO jumped 9% on opening day. And in a rare IPO doubleheader today, Zoom started trading and rose 72.2%.
The strength of these two will be watched closely as Uber inches toward its mega IPO this month. Pinterest’s IPO also marks the end of an era in some regards.
It’s likely the last of the previous generation of social media startups to enter the public markets. Founded in 2009, it watched as Facebook, Twitter, LinkedIn, and Snap all held IPOs.
Pinterest eventually set its IPO price at $19, watched it open at $23.75, and hung on to close at $24.40.
Despite being about 10 years old, the newly public company will face a new era of challenges. Pinterest is still not profitable. And initial strength notwithstanding, Lyft’s stock has tumbled sharply. And of course Snap is still trading at less than half of its debut price two years ago as it has faced withering pressure as a public company.
While Pinterest took a slow and steady route to its IPO, it may find that public market investors aren’t as forgiving or patient if the company fails to post regular growth and eventual profits.