The social media sector is having a harder time telling a clean story to investors. Snap, Reddit, and Pinterest are each down close to 40% this year, and the pressures are different for each company.
Snap has been a consistent disappointment since its IPO nine years ago and its stock is trading near its all-time low. Pinterest is blaming tariffs, with a group of major advertisers pulling back spending, while also facing a harder conceptual question about whether AI assistants will eat into the platform's core use case. Pinterest exists for ideas and inspiration. Chatbots, increasingly, offer the same thing.
Reddit faces a similar threat. Users go there for peer recommendations on products, services, and decisions. If they start routing those questions to AI assistants instead, Reddit's engagement proposition weakens. Counterargument: what Reddit actually provides is the texture of human experience, anecdote, and disagreement that AI-generated responses flatten. Whether that distinction holds commercially is still an open question.
On acquisitions, Amazon is the most-discussed potential buyer for Pinterest, given an existing advertising integration that already routes Pinterest users to Amazon product pages. Antitrust exposure and Pinterest's relatively modest scale make a deal complicated. PayPal has circled the company before. A merger between Pinterest, Snap, and Reddit has been floated but is widely considered unlikely, in part because Evan Spiegel is unlikely to accept a deal that dilutes his control over Snap.