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LinkedIn shares drop 15% after growth outlook misses Wall Street forecasts LinkedIn caught in the Twitter backlash as shares drop 15%
(about 9 hours later)
LinkedIn shares tumbled as much as 15 per cent after it became the latest social media giant to disappoint Wall Street with its growth forecasts, in the wake of Twitter’s 24 per cent stock market slump. LinkedIn has become the latest social media giant to worry Wall Street with its growth forecasts, in the wake of Twitter’s disappointing user numbers earlier this week.
Business networking site LinkedIn’s expected revenues in the first three months of this year and its forecast of annual sales of just more than $2 billion (£1.2 billion) were below analysts’ hopes. LinkedIn suffered a fourth consecutive quarter of slowing growth in the last quarter of 2013. Sales still climbed 47 per cent to $447.2 million. The business-networking site’s expected revenues in the first three months of this year, and its forecast of annual sales of just over $2bn (£1.2bn), were below analysts’ hopes. LinkedIn suffered a fourth consecutive quarter of slowing growth in the last quarter of 2013. Its sales still climbed 47 per cent to $447.2 m.
“Growth is slowing because of a scaling-up of the business,” said Steve Weinstein, an analyst at ITG Investment Research. “As you get bigger, it gets harder.” “Growth is slowing because of a scaling up of the business,” said Steve Weinstein, an analyst at ITG Investment Research. “As you get bigger, it gets harder.”
Revenues from Europe, the Middle East and Africa were up 55 per cent to $108 million. Global membership is 277 million against 202 million a year ago. Mobile generated 41 per cent of traffic to LinkedIn — behind Facebook and Twitter which now get a majority of revenue from mobile. Revenues from Europe, the Middle East and Africa were up 55 per cent to $108m. Global membership stands at 277 million, against 202 million a year ago. Mobile generated 41 per cent of traffic to LinkedIn – behind Facebook and Twitter, which now receive a majority of revenue from mobile.
LinkedIn’s stock market value has jumped almost fivefold since floating in 2011 to reach $27 billion. But shares dropped sharply in after-hours trading last night in response to its results. LinkedIn’s stock market value has jumped almost fivefold since floating in 2011 to reach $27bn. But the shares dropped 11 per cent in after-hours trading on Thursday in response to its results, and were down 7 per cent in afternoon trading on Friday.
Twitter’s share price slumped $16 to $50 yesterday as investors took fright at a major slowdown in new users, although the stock remains almost double its November debut. Twitter’s shares firmed $3 to $53 yesterday after a 24 per cent fall on Thursday as investors took fright at a major slowdown in new users. Its stock still remains almost double the level on its November debut.
In contrast, Facebook has wowed investors with recent growth and its shares leapt 14% last week.