LinkedIn First Quarter 2012 Earnings Is Precursor To Facebook IPO Success:
“Liking” LinkedIn could mean loving Facebook.
LinkedIn Corp., blew out earnings and reported a good start to 2012. LinkedIn, the largest professional-networking website, hit the highest price since its initial public offering advancing about 9 percent after announcing their earnings yesterday and cleared $120 per share today.
The company reported first-quarter sales and profit that were above analysts’ estimates and included an increase in membership. LinkedIn said its membership rose from 150 million to 161 million and our analysis shows growth should continue in 2012 as U.S. unemployment stays weak causing more social networking for jobs. LinkedIn is one of the few internet/social media companies that is making money compared to sites like Angie’s List and suggests the social media sector is not only growing – but profitable.
Facebook is set to IPO this month and the news from LinkedIn provided a bright spot for those who believe the social media phenomenon isn’t over. If LinkedIn can make money with 161 million members, it’s reasonable to believe that Facebook will be extremely profitable with nearly 1 billion users.
The timing of the LinkedIn earnings announcement couldn’t be better. Apple’s stock is faltering even after a phenomenal earnings report, perhaps there may be new tech leaders like Facebook that aren’t based on hardware sales. LinkedIn’s results could increase investor appetites for shares of social media heavyweight Facebook.