LinkedIn still better than FacebookNovember 2, 2012: 12:38 PM ET
LinkedIn (LNKD) continues to be the preeminent social media stock. The company reported earnings after the closing bell Thursday that topped forecasts, sending shares up more than 1.5% Friday.
The stock pulled back as Friday wore on -- shares were up as much as 8% shortly after the market opened -- but they remained in the black even as other social media companies tumbled along with the broader market. Reviews site Yelp (YELP), which also reported earnings Thursday, plunged more than 10%. Groupon (GRPN) shares sank 4% and hit an all-time low in the process.
Interestingly though, the company that LinkedIn is most often compared to, Facebook (FB), also rose Friday. Still, LinkedIn has been a much better stock than Facebook.
And many traders on StockTwits were very eager to talk about how bullish they are about LinkedIn's prospects.
Great points. I'm not sure Facebook necessarily needs to completely mimic LinkedIn per se. But the beauty of LinkedIn is that it has more revenue streams than Facebook and it not dependent on advertising.
LinkedIn was often accused of being boring before it went public because it's not a free site with 1 billion users. But investors love the fact that LinkedIn generates revenue from subscription fees from businesses and premium accounts for individuals.
Online recruitment site Monster Worldwide (MWW) definitely seems to be feeling the pinch from LinkedIn. Still, some think LinkedIn, much like Facebook, has to do more to transition from the desktop to smartphones and tablets.
Ha! That is true. Which is why I didn't give Leigh one when I met him at StockTwits' Stocktoberfest conference in San Diego (oops, I meant to say "the magical island of Coronado) last week!
And one trader is concerned that LinkedIn, again like Facebook, may be losing some momentum.
That's mathematically true. But most companies would happily accept a mere 65% growth rate. Personally, I think the biggest concern for LinkedIn is its valuation. With shares trading at nearly 90 times 2013 earnings forecasts, it can't afford to slip up. This is a stock that has to keep exceeding expectations or it will be punished.
Finally, I'd be remiss if I didn't mention a certain superstorm. I consider myself blessed that my particular neighborhood in Brooklyn was not damaged too badly by Hurricane Sandy earlier this week. My heart goes out to everyone who lost so much. The costs, both in lives and financial damages, are devastating. Still, I always like to end the week with a little levity. And now more than ever we need some pop culture frivolity to distract us from reality.
Disney's (DIS) purchase of LucasFilm was big news this week. But beyond the financial implications of the deal, Star Wars fans found out that there is going to be an Episode 7 that will be released in 2015. That filled many of us geeks with feelings of excitement ... and dread.
Ha! That may not be true though. Even the mighty Empire (which struck back in Episode 5) was still vulnerable.
Anyway, I hope everyone has a great, safe weekend and that life slowly returns to normal.