Jeff Reeves and Charles Sizemore Discuss LinkedIn Earnings On The Slant
Charles Sizemore | Feb 10, 2013 02:22AM ET
After blowing out its earnings report after the bell on Thursday, LinkedIn (LNKD) popped 18% intraday on Friday and is challenging $150 a share. After offering at just $45 for its May 2011 IPO, shares have tripled in a little more than a year and a half for insiders — and for those who bought during a brief dip to around $70 after profit taking from the IPO, LNKD has been a doubler in short order.
Charles Sizemore of Sizemore Capital Management was good enough to chat about LinkedIn with me, and we both agree that LNKD has a much better model than Twitter or Facebook (FB) thanks to the focus on corporate customers and a more educated and wealthy consumer base. There’s also the potential for long-term disruption to the entire job-seeking process online as it steals market share from other job posting/seeking services like Monster Worldwide (MWW).
The problem, however, is that the valuation is just way too rich right now. After all, if Apple Inc. (AAPL) has taught us anything it’s that growth doesn’t always equal big returns for shareholders.
While there are companies like Amazon (AMZN) that continue to see nosebleed valuations for the long-term, I think it’s a risky game — and not one that I would participate in considering the alternatives as the Dow tops 14,000 and investors start talking about a friendlier bull market in 2013 and beyond.
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