My wife has a sign on our refrigerator: "Be Nice or Leave." I smile every time I see it because I admit that much of my life I would describe myself a bit of a rough-around-the-edges gentleman-brawler, but I am proud to say that as much as my instincts want to rise to the ribald occasion, I've been chilling my way toward nice for a years now.
And so is the consumer, for that matter. And if the consumer likes it gentle, likes it nice, likes it SAFE, then the advertiser will like that way and your portfolio will soon be shaped by it, too, because that's where the money is going.
We learned Thursday that Microsoft (MSFT) might have been courting Pinterest PINS, the hobbyist and enthusiast site, not that long ago, perhaps after it failed to buy TikTok late last summer. Makes tons of sense for Microsoft, which is a holding of my Action Alerts PLUS charitable trust.
As Eric Jhonsa noted in an incredibly perceptive piece Thursday, Microsoft, despite its $1.8 trillion market cap, has escaped a lot of the Big Tech antitrust scrutiny and could kill two birds with one stone if it could get Pinterest, prying away an Amazon Web Services client from Amazon (AMZN) for Azure while gaining a lot of consumer data.
Pinterest's stock has been a rocket ever since the TikTok failure, going from $34 to $87, where it now sells at 22x this year's revenues, one of the highest values in this entire market. This was a $10 billion stock two years ago. Now it's valued at $54 billion.
I like the Microsoft-to-buy-Pinterest story line, in part because I believe in Pinterest CEO Ben Silbermann, personally one of my favorite people in business because of his love for the Pinners -- so obvious even if you haven't met him -- and the "Be Nice or Leave" attitude that my wife likes so much.
But what I really like is that the country, and the world, is going toward civil sites, safe sites, places of congregation and help and sweet individuality. 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.
Pinterest isn't the only one. TikTok is sweeter, and affiliation with sweet is something that a Walmart (WMT) would like to have. So would the advertisers. And do you think that it really is coincidental that Twitter's (TWTR) stock is dramatically higher now that a polarizing president no longer tweets? Twitter at its soul is about interaction, not incitement. It's about people responding to each other. That's what so many want. I know I sure try to give it to them and I didn't get to 1.5 million followers by screaming at people to take back something that isn't theirs.
It was incredibly telling that another sweeter site, Snap (SNAP) , saw a decline in ads during the period around the aborted insurrection, because traditional consumer product companies paused their buying: Be Nice or We Leave, I guess you could say.
Right now, Facebook (FB) is not part of the cohort. Millions of hobbyists, but the stink of what went on there hangs on the stock owners who want to go to other places even as Facebook's taint may be in its back pages.
I like Facebook's small and medium-size business initiatives. They are real, I know this. At the same time, Facebook, which is another holding of my Action Alerts PLUS charitable trust, has lost the trust of many, and earning back trust is one of the toughest things to do. You aren't going to pay up as much for the clients of Facebook as you will those of Pinterest because you are afraid you are advertising against the bloodsport of politics. These days, that's a good enough reason for the food and beverage advertisers of the world, let alone the travel and leisure ads that will soon be back in abundance. Pivoting to safety and niceness is more difficult than having it in your DNA the way Silbermann's company does.
Keep in mind the stock market is an amazing judge of the world at times. The fact that buyers would rather pay 22x sales for the stock of Pinterest than 24x earnings for Facebook pretty much says it all.