Ark Buys $9M In Pinterest: Why Cathie Wood Firm Is Bullish On Social Media Stock Despite Growth Concerns

Cathie Wood-led Ark Invest rushed to scoop up shares in Pinterest Inc PINS as shares of the company tumbled 18% on Friday and said the social media platform could become a prime beneficiary of the shift toward social commerce.

What Happened: The popular investment firm, known for large positions in stocks like Tesla Inc TSLA, Square Inc SQ, snapped up 151,929 shares, estimated to be worth about $8.95 million, in the San Francisco, California-based company.

Ark noted that, while the online product and idea discovery platform reported a sequential decrease in MAUs, it reported better-than-expected earnings results for the second quarter on Thursday as well as higher-than-consensus metrics across revenue, average revenue per user (ARPU).

“Although we believe reopening dynamics in a post-COVID environment may have contributed to the lower retention of users, continued growth in its mobile user base highlights Pinterest's high level of engagement in a mobile-first world,” Wood's firm wrote in a note.

Why It Matters: Pinterest reported weaker-than-expected growth in monthly active users (MAUs) in the second quarter and the image-sharing company warned of slowing user growth in the United States, its largest market.

See Also: Pinterest Stock Gets Hammered Despite Stellar Q2 Earnings Beat: Here's What You Need To Know

As per Wood, the social media platform encourages users to discover, from each other, items of interest or sources of inspiration and has the potential of becoming a prime beneficiary of the shift toward social commerce.

Ark Invest deployed Ark Fintech Innovation ETF ARKF to resume buying the shares in Pinterest after months of shedding stake in the company.

Wood’s bet on Pinterest contrasts those of over six analysts who have lowered the price target on the stock. Rosenblatt analyst Mark Zgutowicz believes Pinterest needs to wave significant dollars for creators to play, which doesn’t guarantee they will stay.

Price Action: PINS shares, which have fallen over 23% in the past week, closed 18% lower at $58.90 on Friday.