LinkedIn IPO reminds us of the old days. Priced at $45 & opens at $80 now over $100. Should you buy or wait?

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Remember when IPO’s would open up and than jump to over $100 a share. There was a new .Com IPO almost everyday. At least two or three would hit the market. There are not too many left over from those good old days. When that boom went bust. We should have learned not to jump on the train so fast without checking to see what stops were ahead.

I knew better although I did buy GeoCities stock and was very happy with my return. This time around you should know better too. So let’s get to the point. Is LinkedIn a good buy? The short answer is yes. As long as you have an exit strategy. The stock was priced at $45 but backroom deals (I mean early investors) drove the price to open to the public at $80 a share. I got in at $82 a share. Why would I buy an IPO for that much?

Stocks are a momentum driven beast. IPO’s are the cool kids. Everyone wants a to have a part of it. The more people talk about it the more it will drive the price up. LinkedIn in the long term is not a smart buy. The stock will not and can not sustain above $100 per share. The value proposition is just not there. It’s not like Google that was and still is a leader in it’s field.  LinkedIn has just above 100 million subscribers to its service. Although it has a good mix of revenue from premium service subscribers, advertisers and recruiters; the amount of income it does is not a justification for the inflated price of its stock at the moment.

If you are looking for a quick buck you should have got this stock this morning at $80 to $85. Right now if you jumped in on the stock that was at last glance $110 you would be waiting for the downswing. The MACD Lines should be crossing anytime now. I think the stock will hit $125 before it goes back south. My exit in case you wanted to know is that. I have triggers set at $125 for a high and $100 for a low as an exit. The stock should stable around $60 to $85 in the next few weeks.

If you want a long term stock wait for Yandex. They will hit the IPO market next week. They are the Google of Russia with currently over 64% market share in search and has over 10 billion web pages indexed. Google has about 21.9% of search engine generated traffic. Yandex is the national non-English-language search engine. Expect to see the same price jump that Baidu had.  Unlike LinkedIn Yandex is a long term win.

7 thoughts on “LinkedIn IPO reminds us of the old days. Priced at $45 & opens at $80 now over $100. Should you buy or wait?

  1. Rubens: Will you wait a couple of days to see how LNKD performs?. Or would u recommend a direct sell when your low exit price is reached.

    1. I would exit at the low trigger. Wait never mind they already went below my low trigger. As I stated before you always want to be able to exit IPO’s before they get stable. $100 was the low exit. $125 was the high exit. I got out at $122. Right now the stock is at $94. That is still too high and the boat is sinking. If you missed $80 then it’s too late to jump on. Look out for Yandex next week

  2. You’re trigger was at 125, but with extreme luck sold at 122(less than 1 percent off highs! Do you anounce your buys and sells right in realtime?

    1. I announce after open. Between 10:30am and 12pm It’s not luck just reading the market and research. Linkedin moved high due to hype and CNBC. They are not a leader in social networks. They have 100 million subs vs Facebook’s 600. I sold at 122 because price was volatile around 120. I only use triggers as fail-safe in case I dont have time to keep an eye on a new stock. It’s helpful to use so you don’t get burned. Your next buy should be Yandex. Look for high of at least 150 per share. Also follow @Saintel on twitter. Updates on must buy stocks that will change the market are anouced on there. Then later I have a full write up here as to why I picked that stock. Thank you for the great feedback and question.

  3. I will take a look at Yandex. Thanks.
    I don’t see the transparency though from your LNKD buy/ sell. On your twitter you wrote you bought at 82(less than 3 minutes all day that LNKD traded at 82 or lower), but that was after the price was already much, much higher. Then after the big decline said you sold at 122. There was less than a minute when LNKD traded at 122 or higher yesterday. Great job if you actually executed these trades at these prices. I’m just saying it is hard to believe unless you announce a buy/sell in real time.

    1. Understandable. Realtime information is not an easy task if one does not focus on a single subject. Case in point; the reply to your comment is over 3hours. By the time I get to post an update it’s not real time but it should be enough time to get in on a deal. I think Linkedin was at $87 by the time I got to twitter but by the time of my write up it was almost $105. If someone brought when I said it on twitter they still would have profited. I will do my best to give you real time with the next killer stock on May 23rd

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