July 28, 2011 | In: Technology
LNKD: One of the Most Overvalued Stocks of All Time
I am constantly monitoring LinkedIn’s Stock (NYSE:LNKD), and I can’t help but comment on this stock (even though I will never ever trade it): This stock is one of the most overvalued stocks of all times, here’s why:
- It is currently trading at a P/E ratio of around 2,800 (2,770 at this very moment). Which means that it will take LinkedIn 2,800 years to buy back its public debt with the current earnings.
- LinkedIn might be soon crushed by Facebook, Google, or maybe another emerging social website.
- LinkedIn has one of the worst CTR of all time (some say that the CTR on LinkedIn’s “targeted” ads is less than 0.01%). This is because of the demographics of LinkedIn’s visitors.
- LinkedIn can be easily cloned. It’s not the most intelligent website on this planet.
- There was no reason (other than to fill the founders’ pockets) for LinkedIn to go public. Think about it, why did they need the money in the first place? The company was making enough and it was profitable.
I guess everyone who’s long on LNKD is either a sucker or is someone who knows something I don’t. In my opinion, there will be another market crash because of all these junk stocks (such as LNKD, YOKU, DANG, and maybe FB) in the next year or two.