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LinkedIn surges 6%, nears all-time high

September 5, 2012: 2:41 PM ET

Shares of Facebook (FB) were having a nice day for a change on Wednesday. But another social network stock more accustomed to being a darling of Wall Street was also gaining ground. LinkedIn (LNKD) was up more than 6% after an analyst at Jefferies resumed coverage on the stock with a "buy" rating. Shares are now only about 7% below the all-time trading high that LinkedIn hit when it debuted as a public company in May 2011.

LinkedIn is a very very very very expensive stock, trading at more than 180 times 2012 earnings estimates. That makes Facebook like a dirt cheap bargain by way of comparison. But investors continue to be impressed by the fact that LinkedIn has a more diverse business model than Facebook and other social stocks. LinkedIn generates revenue from subscriptions as well as advertising. And the company's sales and profits have been rising at a faster rate than Facebook's.

Still, some traders on StockTwits are worried that LinkedIn is overvalued.

Xto: $LNKD Jefferies gave it a price target $142... can you imagine the P/E then? :)

momomiester: $LNKD amazing just some upgrade makes it run out of control

It is crazy how much momentum LinkedIn has. But when you consider just how much of a force the company has become in online recruiting .. . to the clear detriment of sites like Monster Worldwide (MWW) ... it is understandable why there is such excitement.

LinkedIn, like Google (GOOG) in search, may be boring compared to Facebook. But that's a compliment, not a criticism.

If you are on LinkedIn, it's probably for a productive business reason, not escapist fun. Just imagine how well the company might do once the economy and job market finally start to heat up again.

chicagosean:I've said it before and I'll say it again: $LNKD stock will be a leader in the next major market rally (whenever that happens).

RedDogT3Live: Talked many times that $LNKD is not $FB and has macro investment potential. Holding up well. Trade based on timeframe

That is true. And that brings me to the final tweet.

Techinsidr: If you bought the highly-controversial $LNKD IPO on opening day, you would be up 21% right now.

That's a good point but only partially true. Yes, LinkedIn is up about 21% from its opening day close. But if you were one of the unfortunate ones who bought the stock above $120 earlier that day, you're still underwater even though LinkedIn has been a phenomenal success.

It just goes to show that investing in an IPO on the first day is rarely a good idea unless you get the shares at the offering price. And even then, that's not a guarantee of success. Just ask anyone who's still long Facebook. Or Zynga (ZNGA). Or Groupon (GRPN). Should I continue?

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Paul Lamonica
Paul R. La Monica
Assistant Managing Editor, CNNMoney

Paul R. La Monica is an assistant managing editor at CNNMoney. He is the author of the site's daily column, The Buzz, and also tweets throughout the day about the markets and economy @LaMonicaBuzz. La Monica also oversees the site's economic, markets and technology coverage.

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