Ahead of the Bell: LinkedIn shares fall

AP News
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Posted: Nov 04, 2011 8:50 AM
Ahead of the Bell: LinkedIn shares fall

Shares of LinkedIn Corp. took a hit in premarket trading Friday after the professional networking service reported its first quarterly loss since going public in May.

The company lost $1.6 million, or 2 cents per share, in the third quarter as it invested more money to expand. It was the first time that LinkedIn has recorded a loss since the final three months of 2009, according to documents filed in preparation for its initial public offering.

Excluding items unrelated to its ongoing business, LinkedIn earned 6 cents per share, better than the break-even that analysts polled by FactSet were expecting. The company's revenue more than doubled to $139 million, also beating Wall Street's expectations.

Still, investors seemed to back off of LinkedIn's stock to see if the company's investments are paying off. Its shares fell $9, or 10.3 percent, to $78.50 in premarket trading Friday. LinkedIn's shares priced at $45 in its IPO, and have since traded between $60.14 and $122.70, the high point achieved on the stock's first day of trading.

Separately, the company also filed for a proposed public offering of $100 million of its shares. It plans to use the proceeds for working capital, including the expansion of its product development, acquisitions and capital expenses.

Jefferies analyst Youssef Squali called LinkedIn's report "fantastic," adding that the results should come as no surprise given the company's "relatively conservative" guidance heading into the quarter and its strong post-IPO momentum. He raised his target price to $92 from $81 but kept his rating at "Hold."

LinkedIn's earnings came the same night that Groupon Inc., the much-ballyhooed daily deals company, priced its initial public offering at $20 per share. The price gives Groupon Inc. a market value of $12.7 billion, making it the IPO the second largest by an Internet company behind Google in 2004.

Google Inc. made its public debut at a market cap of $23. In comparison, LinkedIn went public in May with a market value of $4.3 billion and was worth $8.4 billion at the end of trading Thursday.