Joined Nov 11, 2007
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$LNKD Posts Outstanding Numbers, Stock Crushed for Poor Guidance

“SAN FRANCISCO (AP) — LinkedIn’s rapidly rising stock got demoted late Thursday after the online professional networking service released a forecast calling for its earnings growth to slow later this year as the company hires more workers, invests in data centers and tweaks the way that it shows online ads.

The predicted deceleration overshadowed another stellar performance during the first three months of the year. As has been the case in every reporting period since LinkedIn Corp. went public two years ago, both the company’s first-quarter earnings and revenue topped the analyst estimates that steer Wall Street expectations.

But management’s projections for both the current quarter ending in June and the full year came in below analyst projections, rattling investors who have become accustomed to LinkedIn delivering nothing but pleasant surprises.

The letdown dampened the feverish interest in LinkedIn’s stock, which surpassed $200 for the first time Thursday. After closing at $201.67, LinkedIn’s shares tumbled $20.45, or more than 10 percent, to $181.22 in extended trading.

Even if the sell-off carries through into Friday’s regular trading session, LinkedIn’s stock still will have more than quadrupled from its initial public offering price of $45. As of Thursday’s close, the shares had surged by 76 percent so far this year compared to a 12 percent gain for the Standard & Poor’s 500 index.

LinkedIn has thrived by establishing itself as the go-to place for employers to find talented workers and for people to get job tips and other advice to manage their careers. It doesn’t cost anything for people to set up a professional profile on the site. The Mountain View, Calif., company makes most of its money by charging employers and headhunters for analytical tools and additional access to LinkedIn profiles and the site, such as the ability to send messages to users.

The service now has 225 million members, up from 202 million members at the end of last year.

LinkedIn is now adding more content, giving its audience more reasons to return to its website more frequently and to stay for longer periods. The company hopes that will lead to more advertising to supplement its revenue. As part of that process, LinkedIn plans to place more ads within the stream of the personal updates appearing in the middle of its members’ individual pages rather displaying them on the sides….”

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