will LinkedIn (LNKD) stocks collapse 2012

will LinkedIn (LNKD) stocks collapse 2012 ; LinkedIn is on my list strictly for valuation purposes. We've seen plenty of hype over social media IPOs, and the bubble will eventually burst. LinkedIn ran up over $120 on its IPO day, and anyone who bought there got crushed immediately. This stock traded down to below $60, a 50% fall in just a matter of months.

LinkedIn has rallied recently, thanks to the Facebook IPO hype and a good earnings report. However, the valuation is just too rich for my liking. Even if the company does $1.00 in earnings this year (current estimates are for $0.62, but 90 days ago called for just $0.29), the stock is trading at over 90 times this year's earnings. That is too much in my opinion. I expect that when Facebook IPOs, there will be another social media rally, but expect the bubble to burst after this. This company needs to be perfect to maintain the valuation, just asked Groupon (GRPN) what happens when you miss.

Source : seekingalpha.com
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