I plan to buy 200 share of LNKD (NYSE) LinkedIn Corporation stock. On June 1st, I bought my first 25% of my target goal (50 shares) at $80 per share after putting my buy order in at that price on May 23.
If the stock drops to $75 per share, I will likely pickup and additional 25% of my target allocation.
LinkedIn IPO on May 18, 2011 at $45 per share. Linkedin sold $352.8 Million worth of shares on that day. Source: Reuters
LinkedIn is a nine-year-old company that as of Wednesday is worth $4.25 billion.
Facebook, which is expected to go public in April 2012, was valued at $70 billion in recent sales of the company’s private shares, up from $50 billion at the beginning of the year.
The shares of LNKD were made available to the public at roughtly $95 per share on May 19.
From there the stock shot up to a high of $122.70 before falling back to the low of $$75.20 making LNKD a highly volatile stock. The company pays no dividends and made a small profit in 2010. Projections are for a slight loss in the 2011 fiscal year.
So why buy Linkedin? Here are my 8 reasons:
1. Costly to short – The small float of LinkedIn’s stock had many market analysts predicting it would be difficult and costly to sell the stock short. The princely lending rates this week bear that prediction out.
The average wholesale rate to borrow LinkedIn was 86% Tuesday, Astec’s data show. This means that hedge funds seeking to sell the stock short may have had to pay as much as 181% on an annualized basis to borrow shares, according to the company’s estimates. LinkedIn is the fourth-most expensive stock in the U.S. to borrow at present, the same data show.
2. Proven Growth Track RecordFounded in December 2002, launched in May 2003 now has over 100 million members
3. Executive Expertise -LinkedIn’s CEO is Jeff Weiner, previously a Yahoo! Inc. executive. The company was founded by Reid Hoffman and founding team members from Paypal and Socialnet.com (Allen Blue, Eric Ly, Jean-Luc Vaillant, Lee Hower, Konstantin Guericke, Stephen Beitzel, David Eves, Ian McNish, Yan Pujante, and Chris Saccheri).
4. Expanding worldwide – June 2010, LinkedIn announced it would be opening up a European headquarters in Dublin, Ireland. Additional offices have yet to be announced at the time of this release.
5. Top 10 Most valuable startups as recognized by Siliocn Valley Insider Top 100.
6. Membership ahead of competition in business social networking. Closest competitors are Viadeo (30 million) and XING (10 million)
7. Positive Critical Review – TechRepublic, claimed that “LinkedIn has become the de facto tool for professional networking”. Irish journalist, James O’Sullivan, commented in the Evening Echo, an award-winning regional newspaper in the Republic of Ireland, where the company has its European headquarters, that “LinkedIn.com, a business-orientated networking site, can be an ideal way for professionals to present an online profile of themselves, unlike social networking sites, with LinkedIn you’re outlining all your credentials; presenting the professional rather than the personal you. Considering the sheer vastness of the digital space, the potential for building up a solid base of contacts and fostering new business relationships is boundless.”
8. Growth and expansion of the Linkedin framework. New features such as Linkedin Answers, Linkedin DirectAds, Reading list and blog list, syndication of content, product and services posting and recommendations, CardMunch App, mobile interface to name a few.