As I was taking a look at the pre-market movers this morning, I noticed Pinterest (PINS) was crashing sharply.
The stock closed Friday with a price of $58.06 per share which was down $3.29 from the previous day. In the pre-market it had crashed another almost 16% into the $49 per share range.
Pinterest is a social media platform I know very well. I’ve used it and I know a lot of people across a wide age range who use it and love it.
Seeing the stock crash into a value range peaked my interest.
After some quick research, I believe this is simply a price correction based on news that PayPal will not be acquiring them.
Now, I did make a mistake in my eagerness to jump on this opportunity, but I believe it will not be too terrible once things play out.
I was watching the price fall on the charts and bought a single share at $49.70 believing that would be the bottom of the dip. I was wrong. The price has fallen as much as $.75 more since then so I cost myself by being too eager to get in at a good price.
I’m going to keep a close eye on the price movement today, because it is possible for it to move lower. Possibly even closer to $40 per share.
Either way, I believe this is simply an emotional reaction by investors and the actual long-term value of Pinterest is higher than the $49.70 I paid.
I believe with some time, the price will recover and add a nice profit to The Brandon portfolio in the coming months. I also believe the $49 per share range will prove to be a fair buy-in range as numerous analyst see this stock on the neighborhood of $68-$70 average range.
I’ve been wrong before and I’ve been burned many times buying on impulse. Nonetheless, I believe the risk on this purchase is minimal and I’ll live with the consequences.
UPDATE: At close today Pinterest (PINS) finished up $.98 with a price of $50.68. Not a bad first day rebound. I was feeling good about my decision this morning when I made it, but this certainly makes me feel even better.
UPDATE 2: Day 2 of Pinterest (PINS) was not as kind as the price fell to $47.89 at close erasing my $.98 gain yesterday with a loss of $1.81. As I mentioned in my original post, there is the possibility that the price could fall further to around $40.00. Long-term, I’m still bullish on this buy. I just wish I had held out for a better position.