Is It Time to Short LinkedIn?



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In a word YES.

LinkedIn IPO has surged to a plus 161% growth as reported on CNBC this morning. The news was that the price of the IPO was greatly overpriced, now it seems that Morgan Stanley, the underwriters have screwed the company and shareholders for potentially hundreds of millions according to Henry Blodget on www.BusinessInsider.com. I do not believe even Morgan Stanley could have called this one, but who knows?

As one of LinkedIn’s early users and as the founder of more than one Super Group on LinkedIn, I say that this is a fluke of major proportions and believe that LinkedIn’s real worth will be evident very soon. Remember Netscape, AOL, Geocities and we can go on and on. This feels like the tech bubble of the late 90′s and it may spur a small IPO frenzy.

Also I happen to favor LinkedIn over every other social network out there as far as business to business and executive search is concerned, I believe that if you are in business or an executive you need to be on LinkedIn, but unlike Facebook, LinkedIn, like Twitter, tends to forget who they are and what made them popular in the first place.

I say SELL SELL SELL. Take out your earnings or short this bugger, this can not last.

Early reports came to the conclusion that the IPO was heavily over valuated (is that a word?)

Let’s see if I’ve done this math right ….
LNKD is expected to open at $42-45 per share, with a valuation of $4 billion, and with trailing earnings of $15.4million.
That means a float of 89million shares ($4bil/$45), and it means earnings per share of $0.17 ($15.4mil / 89mil shares) …
that comes to a TRAILING P/E of 260.
Can anyone else say “overpriced piece of garbage stock”? READ MORE (As reported at http://www.VisaJourney.com

The truth about Social Networks is that they are still in their infancy and are changing constantly. Most business CEO’s still do not know how to use these networks and doing business on them is not for the faint at heart. There are real advantages to the use of Social Networks for business, and the early adapters have a better chance at using this medium to their advantage, but the dust is still settling.

It seems that LinkedIn has recently been making changes to the platform to make it’s model more attractive to investors, such as strengthening their job boards on groups, but by doing this they have to tread carefully as not to kill the Goose than lays the Golden Eggs. LinkedIn has grown on a model that has been very open and useful to it’s members, but as they try to monitize they are taking away some of the attributes that got them where they are, for instance they opened up groups to be indexed by Internet search engines while adding major job boards to these groups, but then took away most of the rights of the group creators to control the groups which have really ticked off some of LinkedIn’s most loyal members.

JW Najarian

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