As Facebook shares sag, LinkedIn stock soars
The professional network's shares were up 10 percent in premarket trading and continue to soar in early trading today.
Professional network LinkedIn is making some investors on Wall Street awfully happy.
In premarket trading this morning, LinkedIn shares were up over 10 percent to $102.90. In early morning trading, the company's stock has risen to $106.83, helping it to boost its market capitalization to over $11 billion. Since the beginning of the year, LinkedIn's shares are up 70 percent.
LinkedIn's strong showing today has resulted from its impressive performance during the second quarter. The professioinal network yesterday reported that it earned a $2.8 million profit during the second quarter on $228.2 million in revenue. The company's revenue was up 89 percent over the same period last year when it generated $121 million. LinkedIn also upped its full-year revenue forecast from $915 million to $925 million.
"LinkedIn is benefiting from secular growth, a very nicely diversified business model, and market share gains," Citi analyst Mark Mahaney wrote today in a note to investors. Mahaney was especially pleased with LinkedIn's addition of 1,650 new customers to its Hiring Solutions business, which attempts to connect job seekers with employers.
LinkedIn's strong showing stands in stark contrast to Facebook's continuing troubles on Wall Street. The world's largest social network yesterday closed at $20.04, putting it dangerously close to half the price of its IPO. In early trading today, Facebook shares are up 1 percent to $20.24, but have a long way to go to reassure investors that the situation will stabilize.
Reassuring investors could become far more difficult for Facebook now that the Wall Street Journal has discovered that Fidelity, one of Facebook's largest institutional investors, sold 1.9 million shares across 21 of its mutual funds. In many cases, if large institutional investors are getting out, it's a sign to smaller investors that trouble is afoot.
Although LinkedIn's success stands in stark contrast to Facebook's decline, the professional network still has some climbing to do if it wants to make investors truly happy: LinkedIn's 52-week high is $120.63.