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.