While social media was already an integral part of the American culture, the onset of the novel coronavirus made sites like Pinterest (NYSE:PINS) more vital than ever. With that, PINS stock holders have enjoyed surprisingly strong returns over the past year.
Of course, there are multiple social media stocks to pick from nowadays. Why would PINS stock be any better than the others? It’s a valid question, since PINS isn’t everyone’s first choice.
Sure, we could just look at the incredible rise in the PINS stock price and assume that the company must be doing something right. On the other hand, it’s generally not a good idea to make investments based on assumptions.
So, what separates Pinterest from the rest of the popular social media sites? We’ll examine that question, but first it’s important to look back and see just how far PINS stock has come.
PINS Stock at a Glance
Just because Pinterest is a social media platform, this doesn’t mean that PINS stock was completely immune to the impact of the Covid-19 pandemic.
In February 2020, PINS stock was calmly hovering near the $25 level. Hardly anyone could have predicted that PINS would plunge to a gut-wrenching 52-week low of $10.10 just a month later.
There’s an old saying that investors are supposed to buy in the red and sell in the green. This is easier said than done. Yet, buying PINS stock in the red would have paid off handsomely.
Over the course of the next year, PINS stock would climb steadily and relentlessly upward. As of Feb. 19, 2021, the PINS share price was above $85.
Clearly, the bulls are in control and short-selling PINS stock would be a dangerous bet to make. The next target of $110 should be an easy mark for the PINS bulls in 2021.
Anti-Social Media
Currently, social media platform Reddit is all the rage. The subreddit r/WallStreetBets is particularly popular, and has even been in the financial news lately.
The appeal of r/WallStreetBets is that the more popular users there might have the power to pump up specific stocks.
There’s also a sense of social justice, since some folks have drawn a David-versus-Goliath analogy as r/WallStreetBets users like to battle against big-money short sellers like Citron Research and Melvin Capital.
Yet, there may be a dark side to r/WallStreetBets. The folks there can be aggressive and even nasty sometimes. Newcomers aren’t always welcomed with open arms.
And after a drawn-out and particularly divisive presidential election, other social media sites aren’t necessarily civil places to make friends and share ideas. There’s got to be a “safe space” out there somewhere, right?
The Return of Nice
In a time when civility is a rare and treasured commodity, Pinterest fills a much-needed “nice” gap in the realm of social media.
Really, Pinterest is much more than just a visual discovery engine. It’s a place where folks can share recipes, pictures of crafts and home decorations or whatever inspires them.
Television personality Jim Cramer — whose wife has a sign on their refrigerator saying, “Be Nice or Leave” — offers insight into why we need Pinterest now more than ever:
We have gone through a horror show of a moment in this country, a period so frightening that even rubbernecking feels violent. The reaction: Pinterest, because it is community, not vigilante community justice, but actual community.
In other words, Pinterest isn’t trying to bring “nice” back; it was actually there all along. And that, more than any technical analysis, justifies PINS stock’s ascendance from a $10 billion stock two years ago to a $54 billion stock today.
The Takeaway
The point here isn’t to tell you to buy PINS stock because Cramer likes it. We all need to form our own conclusions about whether a stock’s valuation is justified.
Nevertheless, PINS is worth considering because Pinterest offers something in the social media universe that humankind needs now: kindness, which has value that’s universal and enduring.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
