Pinterest (PINS) is sending a red flag (warning) to investors about the advertising space. PINS stock dropped by 17% after the company posted fourth-quarter results. The mixed first-quarter outlook scared investors.
The firm reported a ~ 15% increase in revenue. Unfortunately, it spent a billion dollars buying shares at around $30. Active monthly users increased by 11.9% Y/Y but are stagnating.
In Q1/2026, revenue growth of 11%-14% is below expectations. Looking ahead, new ad platforms like ChatGPT would carve the advertising pie. Meta (META) and Google (GOOG) will thrive, while smaller firms like Pinterest might struggle.
Pinterest might pursue key AI initiatives, restructuring, and job cuts. The former risks spending heavily on AI that does not pay off. The latter might hurt customer service quality.
In the sports betting sector, DraftKings (DKNG) dropped by 13.5% to close below $22. In Q4, revenue increased by 43% to $2 billion. Margin was 17%. Fantasy revenue like Pick6 and iGaming growth of 20% are the quarterly highlights.
Markets are concerned that the rise of Predictions will increase competition for DraftKings. Still, the firm is investing in DraftKings Predictions.
Your Takeaway
DraftKings investors will need to wait for the U.S. CFTC to rule on whether contracts from the prediction markets count as unlawful sports betting. Recently, the CFTC chair directed its staff to give clear standards for event contracts. Once that happens, the risks in DKNG stock might subside.
