LinkedIn shares plunge a day after earnings report
Shares of LinkedIn Corp. plummeted Friday to their lowest level in more than three years, a day after the professional social-networking company reported significantly lower revenue projections for 2016.
The Mountain View, Calif., company’s stock closed down more than 43% to $108.38.
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On Thursday, LinkedIn delivered a fourth-quarter earnings report in which the company forecast 2016 revenue of between $3.6 billion and $3.65 billion, widely missing the average analyst estimate of $3.91 billion, according to Thomson Reuters.
One of the primary challenges facing LinkedIn is a slowdown in advertising. The trend is compounded by its decision to phase out one of its marketing tools, Lead Accelerator, at a cost of $50 million in lost potential revenue.
Some analysts said LinkedIn shares were overpriced and due for a drop, given rising competition in its field.
“LinkedIn faces competition from numerous sources, such as traditional and paid job boards, other professional networking sites and Internet and traditional media sites,†RBC Capital Markets analyst Mark Mahaney said in a note to clients.
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One bit of bright news: LinkedIn usership grew 19% in the fourth quarter to 414 million, beating Wall Street estimates of 410 million.
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