This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

LinkedIn Is a Bubble: Cramer

Stocks in this article: LNKD

This post by Jim Cramer appeared earlier today on RealMoney . Click here for a free trial, and enjoy incisive commentary all day, every day.



Does the market have to be so suicidal? Do we have to have a social media rager? You know I like this asset class and what it has done for people. But we never seem to learn, and I find LinkedIn (LNKD) totally painful.

I often hear people come on TV about bubbles that aren't bubbles. How many times have you heard about "the gold bubble"? But we have a limited supply of gold and a seemingly unlimited demand for the stuff. We are increasing our supply of above-ground gold by only about 1% a year -- even after this price rise -- but the demand from investors, from traders, from central banks and even from college endowments is gigantic.

But does anyone think that LinkedIn is that special? Does anyone honestly believe that it is worth $10 billion?

NO.

No one.

No one in his right mind.

Look, every day I get heat for recommending Netflix (NFLX), a much loved service with mass appeal that has rapidly moved to solidify its ownership of the space by rolling out streaming content and moving overseas. It is a well-run and extremely profitable juggernaut.

And it is worth $12 billion.

I don't know a soul who "loved" LinkedIn. I think that many companies could be LinkedIn. I also think that if LinkedIn is worth $10 billion, Groupon must be worth $100 billion and Facebook will turn out to be one of the most valuable companies on earth.

We all know this.

We are helpless to stop it, because they only issued a sliver of stock and because of the social media love affair.

If only the company had issued many more shares to create a small gain. I still don't think you could have contained the market cap to be something more reasonable, say 4 or 5 times sales -- $25 -- with many millions of shares sold.

But this is the worst possible outcome.

This is indeed a bubble, and I join the most inveterate bears out there about this silly deal and how it will end.

At the time of publication, Cramer had no positions in the stocks mentioned.


Where will LinkedIn shares close on Thursday, May 26?

$200
$100
$45
$2.50

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs