Thursday, 19 May 2011 15:31

LinkedIn Shares Debut With A Near 100% Pop In Price, Annualized PE Over 1,000!!! Next Question, Whose Gonna Write Me Those Bubble Puts???

As reported by Zerohedge:

And so the internet bubble is back. The market cap of LinkedIn at this price, based on 94.5 million shares is $7,843 million. Taking out $297.6 million in cash means $7,546 million in Enterprise Value. The relevant metrics are:

    • Revenues (pro rated annualized): $375.6 million or Price/Revenue 20.9x
    • EBITDA (pro rated annualized): $53.2 million or EV/EBITDA 141.8x
    • Net Income (pro rated annualized): $8 million or P/E 980x 1086x!

LNKD hits an intraday high of $92.99...

The WSJ take is similar.

And to think, some feel I'm too hard on Apple and RIM! Apple is a true global force still growing in the triple digits (albeit barely), RIM produces massive cash (although quickly waning influence and share), Google looks well positioned to literally take over mobile computing and still growing like a small company and investing accordingly... Yet, add the PE of all of these companies up and multiply by 10x or so, and you'll have a LinkedIn, except that it sports $8 million or so pro forma net income and has a growth rate similar to Apple's, a company nearly 100x larger and much more established!

This is worse than the tech bubble people. At least we had an economy to destroy with a bubble burst back then.

We are still sniffing smoldering ashes from the still bursting housing bubble, while lying about the condition of our banks amidst a pending global blowup of the triumvirate 3!. Oh, well... I guess if banks can't make money the old fashioned way (lending it with the expectation of a risk adjusted profit based on debt service), then they'll take a page out of the history books and do the snake oil salesman thing ripping off those impressed by flowery stories and legends of the Demi-Gods of Wall Street. Yeah, I know. My left ass cheek needs smooching too. Well, the only question left to ask is....

Whose Gonna Write Me Those Bubble Puts???

Hey, on the positive side, LinkedIn is better off that Facebook. You see, Facebook will have to register the whole computer capable populace of the world to justify the Au plated, Goldman Goldilocks fairytale other wise known as marketing materials. LinkedIn will just have to grow revenues 300% or so for about about a decade to make this JPM/MS fairytale have a happy ending. No matter what, I betcha there will be a moral to these stories for investors, though!

Related links, or what banks do when they can't make money banking (traditional lending):

Reggie on Max Keiser discussing topics such as Goldman's Facebook offering that never was, what happens when its the banks that walk away from a home, phantom banking profits that never were, and more shenanigans that are the tour de force that is today's banking system and economy. To skip directly to the Reggie Middleton interview, move to 11:55 in the video.

[youtube 8a6NdwORK5g]

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Last modified on Thursday, 19 May 2011 15:31