Pinterest Dials Down Expectations as I.P.O. Nears Express News

If Pinterest goes public below its last private market valuation, that will not be a first for this generation of highly valued start-ups. Box, a cloud storage company, went public in 2015 at $1.6 billion, below its $2.4 billion private market valuation. The company now trades at a $2.8 billion market capitalization. Square, a payments company that was worth $6 billion in the private market, went public in 2015 at a $2.9 billion valuation. Square now has a $31 billion market capitalization.

In total, private investors have poured about $1.5 billion into Pinterest. A market debut below $12 billion could spell a loss for the ones that invested most recently.

But the company’s earlier investors will still see huge paydays. In its updated prospectus, Pinterest revealed the ownership stakes of its biggest shareholders, which include the venture capital firms Bessemer Venture Partners, FirstMark Capital and Andreessen Horowitz. At the midpoint of the proposed I.P.O. price range, Bessemer’s stake would be worth $952 million, FirstMark’s would be worth $710 million, and Andreessen’s would be $696 million.

The biggest individual shareholder is Ben Silbermann, Pinterest’s 36-year-old chief executive and co-founder. He owns 11.4 percent of Pinterest’s shares, making his stake worth $825 million at the midpoint of the pricing range. Evan Sharp, 36, another co-founder and the chief design and creative officer, owns 2.1 percent of the company.

Pinterest, which makes digital pin boards that allow people to save images and links from around the web, took off around 2011. Pinners, as users are known, create collagelike mood boards on topics like food, events and hobbies. Mr. Silbermann, who has taken a conservative approach to spending and growth, sought to build the company slowly. In 2014, Pinterest began selling ads.

Mr. Silbermann’s methods contrasted with those of other entrepreneurs who lead companies known as unicorns, which are valued at more than $1 billion by private investors. Such companies have typically put a priority on fast growth over profits and take many years to go public. Unicorns that sell or go public below their last private valuation are known as undercorns.

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