Activist investor Elliott Management has amassed a more than 9 per cent stake in Pinterest and is in talks with the social media company, the Wall Street Journal reported on Thursday, citing people familiar with the matter.
Shares of Pinterest soared 24 per cent in extended trading following the report, which said it could not be determined what the discussions between the parties were about.
Elliott has told the company that it is its biggest investor, the report said. The Vanguard Group holds an 8.7 per cent stake, according to Refinitiv data.
Pinterest co-founder and former Chief Executive Ben Silbermann has a roughly 37 per cent voting stake in the company and that could limit Elliott's ability to force changes.
Pandemic darling Pinterest is facing a downturn as red-hot inflation and the Ukraine war curb digital advertising spending, and the company has been trying to shift focus to e-commerce initiatives.
Digital ad-dependent companies including Alphabet Inc and Snap Inc have also warned of tough times ahead for the once booming industry.
Pinterest's stock has fallen more than 50 per cent so far this year.
Elliott Management and Pinterest did not immediately respond to Reuters requests for comment.