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sebastoro (29.23)




May 02, 2013 – Comments (4) | RELATED TICKERS: LNKD.DL

By: Sebastian Toro

An hour ago LINKEDIN $LNKD post the financial results for the first quarter of 2013 and guess what? the Bubble its getting bigger and its popping

At this moment shares of Linkedin are taking a beat of the Cliff with a fall of -10%. Today the stock hit a new record high of 201 usd and that was the capitulation and the euphoria phase for this stock.

The maniacs that buy this stock above 200, I think they wont see this stock coming back to this prices in years, maybe today we saw the top for this stock and in the coming years this will be an study case and example of a euphoria cycle like we saw back in the .com bubble in the 2000s.

It doesn't matter that the company beat expectations because today the investors and wall street will realize that the guidance and the company growth doesn't have anything to do with the company market cap.

Today people will understand that its just absurd that a company that foresee Revenues of 1.45 Billions can have a market cap of more than 21 billions dollars. That's almost 14 times revenue, and that's doesn't make any sense.

The company also said that they expect full year EBITDA to be 340 million... That's not bad at all, But is VERY BAD for a company with a market cap of 21 Billions dollar. We are talking of a company with a EV/EBITDA ratio of more than 55!!

55 Times projected EBITDA!!! how stupid can that be? Really, I don't understand who is buying this bubble.

Today the bubble just got bigger because people are waiting this company to grow at 75 - 55% and that's not going to happen.. this company in the coming years well be growing slowly and they will realize that a 20 billion valuation doesn't make any sense.

Well today the maniacs (I can't call them investors, because they are not) realize that this valuation doesn't make any sense; I think that today we saw the capitulation, and in the next months there's a high chance that we see this stock hitting the 120 - 150 usd range and then maybe we will visit de 100 usd zone.

Disclosure: I am short LNKD.

4 Comments – Post Your Own

#1) On May 02, 2013 at 7:46 PM, NextYearInVegas (< 20) wrote:

While reasonable minds may differ as to the meaning and value of fundamentals, you seem extremely agitated about the stock (all caps and liberal !!!!'s).  Why?  If you are correct in your assessment, you should feel confident in the opportunity that the over-valuation of the market provides.  In shorting the stock, the question from your perspective isn't "why," but "when."  I understand your exasperation in a sense, but it really is a matter of perspective.  Nothing is as certain in the market as the prospect that what appears not to be able to go up any least over a limited period of time.

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#2) On May 03, 2013 at 6:18 AM, Rumtopf (< 20) wrote:

Sorry, but I can't see any drop of 10% in the chart. LNKD closed at 201.81 - hardly what anyone could call capitulation.

Your post is pure rant and not substantiated by the facts.

 I guess your short position is hurting. You have my sympathies. It's hard to see how the stock can keep rising, and a correction may occur - but this might not happen until it fails to meet forecasts!  

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#3) On May 03, 2013 at 4:06 PM, EnigmaDude (58.64) wrote:

Good call.  The share price ended the day down more than 12%.  Does seem to me that it could retreat further but then I thought that about Netflix, too!

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#4) On May 03, 2013 at 5:57 PM, Frankydontfailme (28.82) wrote:

It's due for a correction, but ultimately going higher. No bubble.

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