Jeff Reeves and Charles Sizemore Discuss LinkedIn Earnings on The Slant

From Jeff Reeves’ The Slant:

After blowing out its earnings report after the bell on Thursday, LinkedIn (NYSE:$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 (NASDAQ:$FB) thanks to the focus on corporate customers and a more educated and wealthy consumer base. There’s also the potential for long-term disruption to the entire job-seeking process online as it steals market share from other job posting/seeking services like Monster Worldwide (NYSE:$MWW).

The problem, however, is that the valuation is just way too rich right now. After all, if Apple Inc. (NASDAQ:$AAPL) has taught us anything it’s that growth doesn’t always equal big returns for shareholders.

While there are companies like Amazon (NASDAQ:$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.

SUBSCRIBE to Sizemore Insights via e-mail today.

1 Response

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.