Should Investors Be Worried About LinkedIn?

In this video, Motley Fool analysts John Reeves and David Meier discuss LinkedIn's (NYSE: LNKD  ) announcement this week that it would be selling a secondary offering of an additional $1 billion in new shares. David discusses why this was a great move for the company despite the share dilution, and how he thinks LinkedIn will use the additional cash.

Tired of watching your stocks creep up year after year at a glacial pace? Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.



Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 07, 2013, at 2:27 AM, nicinnihon wrote:

    I disagree with pretty much all the comments in this interview. I think you guys are just trying to rationalize your continued position in the company. The LNKD board is way smart for taking advantage of the now ridiculous share price by offering for sale to bonehead buyers new shares at this Foolish price. It seems prima facia proof of the 'Ridiculousness of It All'l by diluting outstanding shares by a BILLION dollars and having no effect on the share price. How crazy is that? Eventually reality will creep in, like it always does. So go ahead and rationalize, but the only entity to benefit from this move is the company and not the existing shareholders (they got slammed and now just pretending they didn't.)

  • Report this Comment On September 07, 2013, at 5:11 PM, highgrowthcarson wrote:

    Amazingly sensible video. The misunderstanding of this stock by most lay analysts (see above) is rather astounding. But that is the way it is and why money can be made in the market.

    lnkd has a the inside track on pretty much blowing up and taking over the worldwide, 600 billion dollar staffing industry. They need cash to do so -- they need to buy smaller niche -- either geographic or job specialty -- rivals to maintain the power of their network.

    I only wish they had raised more money. As the video explains, the dilutive effects are trivial -- and the market responded appropriately.

    Can lnkd fail to grow into its valuation? Of course. That is the risk an investor takes in stocks like this. But lnkd has a shot of growing 10-30x larger than it is. As an investor you evaluate the probabilities of the various potential outcomes and make your choices.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2626578, ~/Articles/ArticleHandler.aspx, 8/23/2014 5:49:39 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement