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LinkedIn Keeps on Branching Out

Social company doubles its quarterly revenues


As reported Wednesday in the IPOPlaybook, short sellers were accumulating larger positions in Groupon (NASDAQ:GRPN) and LinkedIn (NYSE:LNKD) ahead of their earnings reports this week.

The trade certainly worked in the case of Groupon, which reported a loss Wednesday for its first quarter as a public company and saw its shares lose 14% of their value in Thursday trading.

But it looks like investors didn’t pick up a social-shorting doubler this week. After the close of trading Thursday, LinkedIn released positive fourth-quarter results that sent the stock up about 4%, to $79.80, in early after-hours trading.

LinkedIn’s quarterly revenues soared 105% to $167.7 million, beating Street estimates of $160 million. The company’s non-GAAP earnings of 12 cents per share also beat expecations of 7 cents per share.

The big driver for LinkedIn was its Hiring Solutions business. Essentially, this leverages LinkedIn’s huge user base — which is at 150 million — to provide recruiting opportunities for other companies. The segment posted a 136% gain in revenues to $84.9 million.

Going forward, LinkedIn thinks the momentum will continue. The fiscal 2012 forecast is for revenues of $840 million to $860 million, ahead of Wall Street estimates for $828 million.

Unfortunately for investors, it looks like much of this already has been discounted into the stock price. So unless LinkedIn finds new markets to attack — such as mobile — it will be tough to boost growth enough to drive the stock to significantly higher levels.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”“All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.

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