Pinterest Shares Climb as Facebook Pulls Plug on Rival Hobbi

Pinterest shares rose as Facebook pulled the plug on rival app Hobbi, which amassed only 7,000 downloads since February.
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Pinterest  (PINS) - Get Report shares on Wednesday were climbing after Facebook  (FB) - Get Report said it was shutting down its rival app, Hobbi.

Shares of the San Francisco image-sharing and social-media service designer were up 4.3% to $23.13. Facebook was up 4.4% to $237.01.

Hobbi users received a notification that it would be closing as of July 10.

The Hobbi app first became available in the United States in February and it has managed to amass only 7,000 downloads, TechCrunch reported, citing estimates from the research firm Sensor Tower.

Pinterest shares fell when Facebook, Menlo Park, Calif., released the competing app. Hobbi, according to its Apple  (AAPL) - Get Report App Store description, was meant to “help you document and remember the things you love to do."

“Organize your photos into visual collections and see the progress you’re making over time,” the description added. 

Hobbi was created by a team within Facebook called New Product Experimentation. 

Since the group was formed in mid-2019, it has released at least three other apps, including a matchmaking app for students and meme-creation tool called Whale;  a conversation app called Bump; and a music app called Tuned.

Separately, Deutsche Bank analyst Lloyd Walmsley raised his price target on Pinterest to $27 from $20, while affirming a buy rating on the company.

"Our call here is not about near-term upside for the second quarter but [optimism about] the next six to 12 months, which we view as far more important than near-term risk around covid lockdowns," he said.

The analyst said he saw room for the company to benefit from "multiple advertising product cycles" and enhanced abilities for users to shop through the platform.

"Pinterest continues to invest heavily in ad tech and remains at the point in its life cycle where ad product can unlock the needle-moving ad budget," Walmsley said.