Should You Buy Pinterest's Dip Amid $37M Insider Selling? A Contrarian's Take

The stock market is a game of human psychology, and nothing tests that more than insider selling. Over the past three months, Pinterest (PINS) executives unloaded over $37 million in shares—led by co-founder Benjamin Silbermann, who reduced his stake by 92%. While this might sound alarming, the story isn't black and white. Let's dissect whether this is a contrarian buying opportunity or a red flag.

The Insider Selling Storm at Pinterest

Benjamin Silbermann's sales dominate the narrative. Between April and June 2025, he unloaded 408,332 shares (valued at $13.5M) in a single May transaction and smaller weekly sales totaling $37M+. The key detail? These were executed under pre-arranged Rule 10b5-1 plans, meaning they weren't panic-driven but part of a liquidity strategy. However, the cumulative impact can't be ignored:

• Silbermann's direct holdings dropped from 1.1M shares to 8,414 shares, a 92% reduction.
• Other insiders, including CFO Julia Brau Donnelly and director Jeremy Levine, sold $15M+ collectively during the same period.

The stock dipped briefly to $30.38 in April but rebounded to $35 by June, suggesting buyers stepped in despite the selling. Yet, the sheer volume of sales (23 transactions by 9 insiders in six months) could spook short-term traders.

Contrast with Sezzle: Structured Sales vs. "Fire Sales"

Sezzle (SEZL), a fintech rival, recently saw its CFO, Karen Hartje, sell $921K in shares under a Rule 10b5-1 plan. The difference? Context matters.

• Sezzle's sales: Occurred amid 123% YoY revenue growth and a $36M net profit, making the CFO's move look like a disciplined wealth management decision. The stock stayed near its 52-week high.
• Pinterest's sales: Occurred as the company grapples with a $23.8B market cap (down from $36B in 2021) and faces ad revenue headwinds. While AI initiatives like Performance+ are promising, execution risks linger.

The takeaway? Structured selling by insiders at high-growth companies (Sezzle) isn't a red flag, but at stagnating ones (Pinterest), it can amplify doubt.

Governance and Sentiment Risks: Is Silbermann Losing Faith?

Silbermann still holds 46.8M Class B shares, retaining voting control, which suggests no governance crisis. However, the 92% stake reduction is a stark move for a co-founder. Possible rationales:

1. Wealth Diversification: Silbermann's net worth is tied to Pinterest; spreading risk is prudent.
2. Tax/Estate Planning: Trusts like the Benjamin & Divya Silbermann Family Trust often execute such sales.
3. Silicon Valley's "Exit" Culture: Founders often monetize over time, even if they stay involved.

But perception is reality. Repeated insider selling can erode investor confidence, especially if the stock underperforms peers.

Valuation: Is PINS Undervalued or Overhyped?

Let's crunch the numbers:

• P/E Ratio: ~78.53 (vs. 2021's 30–40 range), reflecting lower growth expectations.
• EV/Revenue: ~1.0x, reasonable for a tech firm with sticky user base (345M monthly active users).
• Analyst Targets: A “Moderate Buy” consensus with a $40.42 target (15% upside from $35).

Contrarian Play: If the market overreacts to insider selling, the dip could be a buying chance—provided Pinterest executes on AI and ad innovation.

The Investment Thesis: Buy the Dip, But Mind the Risks

Bull Case (Buy):
- Fundamentals: AI-driven ad growth (Performance+), Gen Z engagement, and a $23.8B market cap with $104M+ in quarterly revenue.
- Sentiment: Selling pressure creates a “buyers' discount,” especially if the stock holds above $30.

Bear Case (Caution):
- Supply Shock: Over $37M in insider sales could depress short-term liquidity.
- Sector Headwinds: Tech stocks are volatile; ad-driven models face macroeconomic scrutiny.

Actionable Strategy:
- DCA (Dollar-Cost Average): Start a position at $35, scale in if it dips to $30–$32.
- Set a Stop-Loss: Below $28.50 (2025 low) signals broader weakness.

Final Take: A Contrarian's Opportunity, But Proceed With Caution

Pinterest's insider selling is a mixed signal. While Silbermann's exit is material, it's likely strategic rather than a vote of no confidence. The stock's valuation and fundamentals argue for a long-term hold or dip-buy, but investors must acknowledge near-term volatility from supply pressure.

Bottom Line: If you believe in Pinterest's AI roadmap and user retention, the $37M insider selling could be a blessing in disguise. If not—stay on the sidelines.