Pinterest's stock jumped 8% after activist investor Elliott Investment Management made a $1 billion investment in the social media company.
The company said it plans to use the funding to buy back stock as part of a $3.5 billion share repurchase program approved by the board.
"Elliott's investment is a strong vote of confidence in the work we have done to build our business and the significant opportunities ahead for Pinterest," said CEO Bill Ready in a release.
Marc Steinberg, who is a partner at Elliott and a member of Pinterest's Board, said the firm sees "substantial opportunity ahead" for the social media company.Â
Last month, Pinterest slumped following a lackluster fourth-quarter earnings. At the time, the company said the tariff shocks weighed on large retailers and led to a pullback in advertising.
In January, the company also axed less than 15% of its workforce and cut back office space as it prioritizes artificial intelligence.
Pinterest shares have plummeted 32% this year as the company battles slowing growth and reduced advertising spending as businesses deal with the tariff fallout.
As part of the deal, Elliott will purchase $1 billion in convertible senior notes at an initial conversion price of $22.72 per share. That represents a 30% premium to the stock's closing price on Monday.
