LinkedIn stock soars after strong fourth quarter
LinkedIn is connecting with investors.
The dominant professional networking site was one of the few bright spots Friday on Wall Street. Its shares skyrocketed nearly 18% to $89.96 in the single biggest one-day jump since its initial public stock offering in May. LinkedIn’s stock has doubled in value since the IPO.
The jet fuel powering the professional networking site: its fourth-quarter earnings, released Thursday. Revenue more than doubled from the previous year to nearly $168 million. The Mountain View, Calif., company earned $6.9 million, surpassing analysts’ expectations. And it forecast higher in 2012. LinkedIn expects its revenue to rise as much as 65% this year to $860 million.
The site’s popularity also continues to climb. LinkedIn increased its membership to more than 150 million from 131.2 million in the third quarter. Signing up more professionals helped LinkedIn sell more services and pick up more advertisers.
Analysts are bullish on the company’s prospects.
In a research note, Jefferies & Co. analyst Youssef Squali said he’s keeping his estimates above other analysts’ and management’s “as we don’t see any significant threat to the model in its current form.” His price target is $92.
J.P. Morgan analyst Doug Anmuth raised his price target to $90 from $84.
Trading restrictions lift on about 55 million shares held by insiders beginning Feb. 27, which could cause shares to tumble. The restrictions were imposed as part of LinkedIn’s IPO. But all but 7 million of the shares are owned by LinkedIn’s executive chairman and co-founder, Reid Hoffman, and two venture capital firms, which were early investors.
LinkedIn may also run into competition from Facebook, the world’s largest social networking site, which filed for an IPO last week.
San Francisco start-up BranchOut is one company building a professional network on Facebook, which has more than 845 million users. It says it has added more than 50 million profiles in the past two months.
RELATED:
LinkedIn third-quarter loss disappoints investors
LinkedIn CEO Jeff Weiner keeps Facebook away with keg stands
