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But what is it really worth? I just think this is all dumb, outside of very astute observers the media is falling into the trap of believing in extrapolation. Its sort of like AIG, the government's piece is worth a lot if you take a tiny floating piece that trades and say all shares are worth that. Problem is the non-floating part owned by US Treasury couldn't possibly be sold for anything near market price right now. If you truly believe the equity owners who don't have publicly traded shares can get the same value for their stakes as shareholders can right now you are just plain gullible.
This was a brilliant move by bankers, make no mistake. They sold these guys who didn't really need the money that much that they could create a demand squeeze and take advantage of Facebook's unwillingness to go IPO. It was a pure opportunity to bring in capital without really giving up much and they took it. It means nothing about the market, the competitive space they are in or what the company is really worth and they all know it. It was just a well-executed strategy and the financial and wider media is just eating it up not realizing what is fact and what is just hype.
Ren Ren (RENN) is a good example. The IPO price for the "privileged" was $14.
It opened the first day at $19.50, the high was $24 and it closed down at $18.01.
The rumors are that the Chinese government will shut these type companies down, over time.
Since May 4th, RENN has visited a closing low of $12.26 on May 24th, and is $13 today.
So much for being among the "privileged" to have gotten some at $14, you are losing 7.1%.
And with restrictions on being able to sell, they could not sell with the 41% gain they had, at $24.
Of course LNKD is not a RENN in any way. LNKD may be over priced but there are many over priced stocks that stay over priced.
Even taking growth potential into account, based on current earnings, IMHO this stock should be trading under $10 a share. I personally thought $45 was way to high a price to start with, and I was stunned when I saw it go up over $100. How would you have liked to have bought this late that first day at $122? Absolute lunacy if you ask me.
Even taking growth potential into account, based on current earnings, IMHO this stock should be trading under $10 a share. I personally thought $45 was way to high a price to start with, and I was stunned when I saw it go up over $100. How would you have liked to have bought this late that first day at $122? Absolute lunacy if you ask me.
Three academics say there was a bubble in LinkedIn Corp's shares during the first four days of its trading, which they have determined definitively using a model they designed.
The three have devised a model they say can establish in real time whether prices in a market are doomed to collapse.
So dont think we're in a full blown bubble yet, though seeing some extremely sky high valuations. Even though LinkedIn is making money, they even expect to be negative per their filing. Im staying away. On a separate point, Economist had an interesting issue about whether we are in a tech bubble; specifically outlining points on how this bubble will be inflated by the angel investors and pre-ipo markets.
And when i think linkedin was bad, groupon is even worse. Im still taking a look at their filing, but their revenue growth seems unsustainable, little barriers to entry, and they use a made up term to value their business called CSOI.
So dont think we're in a full blown bubble yet, though seeing some extremely sky high valuations. Even though LinkedIn is making money, they even expect to be negative per their filing. Im staying away. On a separate point, Economist had an interesting issue about whether we are in a tech bubble; specifically outlining points on how this bubble will be inflated by the angel investors and pre-ipo markets.
And when i think linkedin was bad, groupon is even worse. Im still taking a look at their filing, but their revenue growth seems unsustainable, little barriers to entry, and they use a made up term to value their business called CSOI.
I can not see any overall tech bubble. HPQ, CSCO, MSFT, AAPL, GOOG, INTC, and many more trade near 10 times forward earnings or less.
LNKD was a bubble on day one, priced at around 45, opened around 92 and high as 122.
Now near 81. A couple analysts like it, when it gets under $30.
Well, just add Pandora to the mix now. Another company that really doesn't make much money. I can think of a thousand different companies that actually sell something tangible to put my money into. With these websites, what is too stop someone else becoming better at it. Remember when Myspace was big, now its Facebook, and in a few years it could be something we haven't heard of yet.
I used to work for one of these companies in the golden days of .com and I lost $80,000 overnight when the people woke up and figured out that the books were cooked and the company doesn't provide any value. I used LinkedIn but I don't think it provides any value, I sure didn't get any job offers from anyone no matter how big the number of people I am linked to. The only way this company will remain where it is. So if you bought into this and you can make a dollar, take it and run.
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