Originally posted on June 7, 2011 …..LinkedIn is trading at 70 odd bucks. Technical/Stock analysis is not my forte. But it appears to be that the company and the stock could go either of the two ways:
Also, the influx of new capital will start showing results. It already has. There is a Linkedin Sharing option appearing on a majority of the websites. Sharing through linkedin will soon go viral = virality means more subscribers.
Revenue streams. Lots of room to grow here. Ads, job posting by employers, apps (new and upcoming) e.t.c. Also don’t forget their subscription model. Even if 5% of their 100 million user sign up for the most basic of the paid subscriptions that is 100 millions $ in revenue just from paid subscription alone! (5 mill * 20$ for the basic business package). That's 100 mill per month. So maybe their billion $ ++ evaluation was not that far-fetched.
But then again, it probably won’t be 5% of their user base signing up for a paid mechanism. More like 1 to max 2%. It’s still a good chunk of change. And they are leveraging these other mechanisms to get the user (different types of users) to pay more. Soon you will also have all major corporations coming to these guys to buy customer specific data off of them. Same way FB is doing. That’s a cash cow for Linkedin as 95% of their user base comprises of professionals. Marketeers are going to flock to them in order to be able to build better customer profiles. So you can see it’s only beginning to LNKD. I think they are going to conjure up effective ways of building and launching viral campaigns. Their goal will be to become the de facto professional grade social networking platform. And viral campaigns are the way to do that quickly and effectively. So you saw the “share” button or whatever they call it. Their goal will be to go from 120 mill to 200 and then 300 mill relatively quickly. When that happens, companies start focusing on growth and it takes their focus away from innovation. Twitter is a prime example here. Something Evan Williams admitted to recently. I don’t know if the same wil occur with Linkedin. But it doesn’t have a menacing competitor over the horizon. Bottom line if you ask me, the stock is going to drop.(I stand corrected as the stock shot up 7% the very next day)
But the potential for the LNKD as an enterprise is huge. Best amongst all social networks (for investors).