Linkedin Loses Nearly 40% Of It’s Value In Just 3 Days

LinkedIn August 9, 2011 7 Comments

Investing in stocks is a risky business at the best of times and investing in social media stocks that have just IPO’d is an even riskier business. Last week Linkedin announced results that blew away expectations but just a week later they are feeling the full force of the market and have lost close to 40% of their overall valuation in just 3 days. The stock which had been trading as high as $112 at the end of last week is in free fall and last night closed at just $73. The company which only went public in May at the price of $45 (this doubled in the first days trading) has seen a huge fluctuation in it’s share price and although many are still making a profit on their initial stake there will be many who bought in last week at a high after seeing all the positive news and have now been stung badly. The alarming thing is that the stock seems to show no signs of stopping the slide and it could be back to the original IPO price if things keep going like this.

It will be interesting to see how investors react to the other IPOs that are on the way now including Groupon, Zynga and ultimately Facebook next year. Many people are in these stocks to make a quick buck because of all the hype around social media and with the markets acting so turbulently investors seem to be pulling their cash out as quickly as they put it in. There has been a lot of talk about a bubble in social media stocks and this could be the start of them getting a pretty sharp dose of reality and coming back to earth.

Tags