LinkedIn is another social media company coming out with a report on thursday. The stock has seen a bumpy ride lately and the question is whether the investor are long or short. LinkedIn is the world`s professional network and are a little bit bigger than Twitter.
Twitter`s market cap is $21,25 Billion , while LinkedIn`s market cap is $27,60 Billion. I`m not in doubt that LinkedIn will continue to grow in the long run. The concept look pretty solid and I think Reid Hoffman (founder) know what he is doing. He has been in this business since the beginning of the 90`s.
The stock is trading at $208 on Wednesday 11 p.m New York time, and some investors expect the stock to jump up to $260 in the short-term. Higher estimates is $300, while lower estimate is $180. Earlier this year the stock peaked at $276.
CEO Jeff Weiner said that revenue had been cut to $670 million compared to analysts expectations for $712 million in the Q2 announcement. The reason was not related to slower growth, but to foreign currency headwinds. It was also related to cost for the integration of Lynda.com, and the stock plunged about 25% in one single day.
Last year LinkedIn acquired Bizo Inc, Newsle Inc and Bright Media Corporation.
LinkedIn has three product lines which is Talent Solutions, Marketing Solutions and Premium Subscriptions. All three product lines are sold through two channels. They have about 277 million members in over 200 countries.
Those of you who read my articles regularly know that I have talked about Twitters`s MAU`s, but LinkedIn is worse. They have fewer users and they spend less time on the platform. Among the top social media platforms, LinkedIn is at the bottom with only 9,8 minutes of usage per day.
Let`s face it. LinkedIn is not Facebook. Nor is it Twitter. It`s a different platform with a different consumer behavior. In fact, in this scenario, Twitter shouldn`t focus on users and try to be like Facebook as they do today. They should change their business model and be more like LikedIn. If not, sell or merge.
We know that most US millennial don`t check their Twitter accounts very often. So is it for LinkedIn. 47% check their Facebook account more than once a day. LinkedIn: 6% and Twitter: 23%. Despite that; LinkedIn is over 30% bigger than Twitter. That`s why I say Twitter should merge with Facebook as we know the business model today or simply keep the company and change their strategy/business model. 300 million users is not good enough. It should be a least 1 Billion.
More than 28% of people worldwide will use a social network regularly in 2015 and the audience will surpass the 2 billion mark this year.
Analysts expect EPS to plunge to $-0,32 from last years $0,1 per share. Wall Street forecast 6,67% negative EPS growth and EPS Q2 came in at $-0,30. In March 2015, EPS was $-0,18, but in December 2014, it was $0,12.
LinkedIn has underperformed over 19% the S&P 500 and as you can see the stock is in a downtrend right now. Analysts are forecasting earnings decrease of -786%, but I belive that LinkedIn will bounce back and continue to grow the coming years.
LinkedIn report after the bell on Thursday.