Wednesday, February 1, 2012

Linkedin Corp

I think we should be more and more cautious with all these new companies emerging in the public offering world.
It reminds me of the Internet bubble that blew up in 2000.

One of these companies is LinkedIn. I am starting a short position on it.
I just don't believe that a company that has a P/E of 1,447 can continue to please the shareholders for long.

Starting a short @ 72.00$



7 comments:

Anonymous said...

Actual PE is quite insignificant for this sort of fast-growing stocks.
5y forward P/E is rougly 20 (Google is now 19.5), assuming earnings will growth at 50% average pace for the next 5 years. If you dont belive this will be possible, lets short the stock.

The Imperatore said...

Yes you are undeniably right in saying that the P/E isn't very significant for these types of companies but it still shows you how ridiculously expensive it is right now. The stock price is way too high compared to what the company really generates now.

Forward P/E do you really believe in that :) ?

Anonymous said...

I dont know, I've no idea about the company prospects (for this reason I dont trade it), but Google 2004 EPS were roughly 1$ and in 2009 they were 13.5$ (70% annual growth) so... it's not impossible.
We'll see ;)

The Imperatore said...

It's not impossible indeed. We'll see how it works out.

I'm still shorting it though :)

Anonymous said...

how is this doing?
told you :P

The Imperatore said...

Haha yes it's not going as forecasted yet :)
I should have focused on Groupon instead, but I'm pretty sure Linkedin is going much lower in 2012.

Like we say, when you trade, timing is everything.

Anonymous said...

So, I hope you're not holding this short anymore... :D