Clearly, David is drinking the LinkedIn koolaid, after the company announced a most horrendous earnings outlook. David cite a wide array of reasons to like LNKD, from its high net worth, professional demographic, to its expansion in dog eating China. Nevertheless, the stock will now join the ranks of YELP, TWTR and Z, of former social media darlings turned into drek.
Even after tonight’s 30% drop, LNKD is trading upwards of 7x sales and 35x earnings–putting in the same ballpark as FB–who is actually crushing numbers. If it were to fall in line with, let’s say the losers at TWTR, then the stock could drop by another 30% from where it’s trading in the after hours.
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They bought Linda.com for $1B or $1.5B last year when the CFO of another company I know that actually turns a profit told me he bid $150M. Said above that he would be losing money. It’s sad how many companies make the same mistakes. LinkedIn has no idea what it’s doing and has the same issue as Twitter: a shitty business model with lack of revenue opportunities.