LinkedIn Corp (LNKD) Shares Plunge on Poor First Quarter Guidance

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It’s not too often that you see a company report better than expected top and bottom line numbers for the quarter and stil have their stock drop more that 30%, but that’s just what’s happening today with LinkedIn Corp (NYSE:LNKD). The company reported an EPS of $0.94 on $862 million in revenue for the fourth quarter, beating analyst estimates of $0.78 per share on $858 million in revenue by a wide margin.

The negative news came way of LinkedIn Corp’s (NYSE:LNKD) first quarter and full-year guidance. The company said that they expect to earn $0.55 per share on $820 million in revenue for the first quarter. Analysts had expected an EPS of $0.75 per share on $868.3 million in revenue for the quarter.

“Our strategy in 2016 will increasingly focus on a narrower set of high value, high impact initiatives with the goal of strengthening and driving leverage across our entire portfolio of businesses,” LinkedIn CEO Jeff Weiner said in prepared remarks. “Our roadmap will be supported by greater emphasis on simplicity, prioritization, and ultimate ROI and investment impact.”

Shares of LinkedIn Corp (NYSE:LNKD) are trading down $64.83 or 33.66% in the premarket. The stock increased 0.18% or $0.34 during the last trading session, hitting $192.62. About 701,800 shares traded hands. LNKD has declined 7.54% since July 1, 2015 and is downtrending. It has outperformed the S&P500 by 1.33%.

From a total of 16 analysts covering LinkedIn (NYSE:LNKD) stock, 11 rate it a “Buy”, 0 a “Sell”, and 5 a “Hold”. This means that 69% of the ratings are positive. The highest target price is $311 while the lowest target price is $184. The mean of all analyst targets is $256.02 which is 32.91% above today’s ($192.62) stock price. LinkedIn was the topic of 26 analyst reports since July 28, 2015 according to the firm StockzIntelligence Inc. Nomura initiated shares on December 4 with a “Buy” rating. FBR Capital maintained shares with a”Mkt Perform” rating and a $189 target share price in their report from an October 30. Barclays Capital maintained LNKD stock in a recent report from November 2 with a “Overweight” rating. Axiom Capital maintained the rating on October 30. Axiom Capital has a “Buy” rating and a $285 price target on shares. Finally, Canaccord Genuity maintained the stock with a “Buy” rating in a report they issued on an October 30.

The institutional sentiment decreased to 1.01 in Q2 2015. It’s down 0.05, from 1.06 in 2015Q2. The ratio turned negative, as 57 funds sold all their LinkedIn Corp shares they owned while 154 reduced their positions. 50 funds bought stakes while 163 increased their total positions. Institutions now own 95.21 million shares which is 4.27% less than the previous share count of 99.46 million in 2015Q2.

Maveron General Partner Iv Llc holds 100% of its total portfolio in LinkedIn Corp, equating to 572 shares. Scge Management L.P. owns 240,000 shares representing 7.39% of their total US portfolio. Moreover, Glynn Capital Management Llc has 6.99% of their total portfolio invested in the company, equating to 111,295 shares. The California-based Criterion Capital Management Llc has a total of 5.73% of their portfolio invested in the stock. Ibis Capital Partners Llp, a United Kingdom-based fund reported 71,207 shares owned.

Since March 3, 2015, the stock had 0 insider buys, and 15 selling transactions for a total of $8.10 million in net activity. Gamson Michael sold 4,722 shares worth $929,429. Callahan Michael John sold 698 shares worth $136,445. Scott James Kevin sold 5,059 shares worth $947,055. Taylor Susan J.S. sold 612 shares worth $114,211. The insider Battle A George sold 174 shares worth $32,627.

LinkedIn Corporation is a professional network on the Internet. The company has a market cap of $25.21 billion. The Company’s three product lines include Talent Solutions, Marketing Solutions and Premium Subscriptions. It currently has negative earnings. All three product lines are sold through two channels, an offline field sales organization, which engages with both large and small enterprise customers, as well as an online, self-serve channel, which includes enterprise clients and individual members purchasing subscriptions.