LinkedIn Plummets After Earnings

Shares of LinkedIn, Facebook, and Microsoft were active on Friday.

May 2, 2014 at 11:30AM

The Dow Jones Industrial Average (DJINDICES:^DJI) was down 20 points as of 11:30 EDT. This comes despite a stronger than expected update on the U.S. labor market. Dow Jones component Microsoft (NASDAQ:MSFT) was down a bit more than its average after it issued a patch fixing a security flaw in its Internet Explorer browser, while LinkedIn (NYSE:LNKD) shares were down 4.9% in the wake of the social network's earnings report. Facebook (NASDAQ:FB) shares also declined.

Jobs data comes in strong
According to the Bureau of Labor Statistics, the U.S. economy added 288,000 jobs last month. That's much better than the 210,000 that economists had anticipated. The unemployment rate fell to 6.3%, while economists had expected 6.6%.

A strong jobs report should generally be expected to translate into a strong stock market, but investors may have assumed the report could catalyze a reaction from the Federal Reserve. With the labor market improving, the Fed could wind down its asset purchase program faster than anticipated. 


Source: Wikimedia Commons.

Microsoft fixes IE
Microsoft's Internet Explorer patch corrects a security issue that had plagued users for the last several days.

Interestingly, Microsoft chose to release the update for Windows XP. Officially, Windows XP support had ended, and users of the operating system who had not yet upgraded should have been on their own. Microsoft's decision to patch Internet Explorer for XP could endear it to some users, but it also may have been foolish -- in the absence of a security patch, XP stragglers would have been far more incentivized to upgrade to a new operating system. 

LinkedIn drops after earnings
LinkedIn beat analysts' expectations in its quarterly report, released Thursday afternoon. Earnings per share of $0.38 exceeded the $0.34 that analysts had anticipated. Revenue was $473.2 million (estimates called for $466.57 million).

The problem came from the company's disappointing guidance. For 2014, LinkedIn expects sales of $2.06 billion to $2.08 billion -- less than the $2.11 billion that analysts had anticipated. That may not seem like much of a difference, but LinkedIn is a highly valued stock, trading with a price-to-earnings ratio of more than 680. Any slowdown in its growth could translate into less expensive shares.

Facebook trades lower
The 0.4% decline in Facebook shares may have been partially attributable to LinkedIn's drop. Weakness in a rival social network may have translated to weakness in Facebook, although the companies offer fairly different services.

Earlier this week, Facebook announced a number of new initiatives designed to make it a more integral part of the mobile Web experience. Among other things, Facebook announced App Links, a service that allows mobile apps to easily link to one another, adding a greater degree of connectedness to the mobile Web ecosystem.

Apple's next revolutionary product
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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