LinkedIn shares plunge a day after earnings report - Los Angeles Times
Advertisement

LinkedIn shares plunge a day after earnings report

LinkedIn Chief Executive Jeff Weiner speaks at an event at company headquarters in Mountain View, Calif., in 2014.
(Marcio Jose Sanchez / Associated Press)
Share via

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.

See the most-read stories this hour >>

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.

Advertisement

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.

Advertisement

SIGN UP for the free California Inc. business newsletter >>

One bit of bright news: LinkedIn usership grew 19% in the fourth quarter to 414 million, beating Wall Street estimates of 410 million.

Follow me on Twitter: @dhpierson

Advertisement

ALSO

Mattel and Hasbro may be looking to merge their operations

Marinello Schools of Beauty abruptly shuts down after federal allegations

Sluggish jobs report raises questions about the direction of U.S. economy

Advertisement