Professional network LinkedIn have wiped away $10 billion of the company’s market value in one day. cofounder Reid Hoffman is now worth about $1 billion less than yesterday.
Thursday, the Mountain View company reported fourth-quarter earnings that beat Wall Street’s expectations. Its earnings release revenue was up 34 percent from the year-ago period, and its loss was lower than expected. It also reported that its number of users rose 19 percent, to 414 million with mobile visits now making up 57 percent of all traffic. But it was its weak first-quarter forecast that stood out, and shares plunged in after-hours trading and are falling even further today.
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LinkedIn also announced that it was killing Lead Accelerator, a business-to-business ad network it got with the 2014 acquisition of Bizo.
According to Business Insider Pacific Crest’s Evan Wilson and Tyler Parker did not like this decision.
They said in a note on Thursday:
We would understand if the ad network had grave privacy issues or if there was no demand, but other examples show us this is not the case. Now Sales Navigator really is LinkedIn’s only big near-term opportunity to materially increase the monetization of its data set. Ugh.
Over the past year, LinkedIn shares have fallen by about 52 percent.
“We did not learn our lesson, ” the Pacific Crest analysts wrote. “LinkedIn has rarely given investors a reason to own the stock in 1H and it has happened again. It will have to spend the balance of the year restoring confidence in a much tougher environment.”
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