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11/30/2022 |

Cestrian Capital Research Presents: The Mood Board Leans Happy

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The Mood Board Leans Happy

Pinterest, as you will be aware, is all over.  A lockdown doomscrolling throwback which literally no one uses anymore because, really, who has time to look at different colored paints and stuff when you have work to do and then family and friends to see?  This thing is a busted flush destined to go the way of so many other flaky retail e-commerce plays.

Oops.  Not so flaky perhaps.

Here’s since its IPO.  We start our wave count at an imaginary zero … this works surprisingly well for recent IPO stocks.  From the Wave 1 peak in February 2021, the stock fell to a textbook 78.6% retrace of the whole move up, bottoming out three times on the weekly between May and July this year.  (You can open a full-page version of this chart, at this link)

This is a daily chart of PINS showing a .786 fibonacci retrace.


Now let’s zoom in to the daily and look at the power move-up since the May lows. Yes, May lows.  Powered through June unlike the market at large, and shrugged off November gloom again unlike most of the rest of the market.

You can open a full-page version, here.

This is a daily chart of PINS created by Cestrian Capital Research

If this continues, next stop $28-29.

You see, behind the move-up is the combination of a new CEO and an activist investor, Elliott Management.  Elliott means to make money and we see Plan A of that playbook being; Ramp up the company and then sell the whole thing.  Which offers the potential for a gap up on announcement day should it come – whereupon PINS will become one of a long line of promising tech stocks that are being acquired cheaply by those blessed with longer timelines and fatter balance sheets than your average Chad “0DTE” Brotrader.

We rate PINS at Accumulate up to around $29/share, whereupon we believe a ‘markup’ zone may come into being – that is, the period when other investors are piling in on ideas that you came to early and funded already.  We’ll keep you posted on how it goes.

Cestrian Capital Research, Inc – 30 November 2022.

Disclosure:  Cestrian Capital Research, Inc staff personal accounts hold long positions in $PINS

Get more from Cestrian Capital Research at our website, here.

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