More often than not I am baffled by how Wall Street works.
First, in case you haven’t noticed, the markets are at all time high at the exact same time the economic uncertainty for the ‘little people’ is staying at very high levels. The president of the US claims to be for the ‘little guy’ but coddles Wall Street and celebrates their success which means the rich get richer (which I am fine with by the way) but the rest of the world gets, well, hosed. Makes no logical sense but maybe emotionally driven buying and selling shouldn’t make sense. You make the call.
Then you have the case of LinkedIn who had the gall to beat the street’s expectations yesterday only to see it’s stock drop by some 9% because it’s guidance for this quarter did not meet the Street’s expectations. What expectations? Are they rubbing a crystal ball and seeing just how much LinkedIn should or should not make in the future and then believing it? Ugh. I know it’s been this way forever but it doesn’t make it right.
Anyway the following details from the LinkedIn ‘performance review’ come from USAToday.
LinkedIn says its first-quarter net income grew more than fourfold as revenue increased sharply, but its outlook is below Wall Street’s expectations.
Shares of the online professional networking service are down sharply in extended trading.
LinkedIn said Thursday that it earned $22.6 million, or 20 cents per share, in the January-March period. That’s up from $5 million, or 4 cents per share, in the same period a year earlier. Adjusted earnings were 45 cents.
Good luck to LinkedIn which has been one of the best performing social media stocks ever. It looks like they have set a bar just high enough that those on Wall Street want to wring everything they can out of the company. Of course, causing the stock to drop 10 or so percent now allows for buying at the low and gaining profits when it bounces back, right? Nah,the markets are not being manipulated ….. ever. Yeah right.
If you would like to read what the Wall Street Journal has to say as an explanation of this feel free.
Oh well. What are your thoughts?