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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



) -- Opinions swirl. Information is exchanged at a lightening pace. Money is made. Money is lost. Somebody smiles. Somebody cries. Somebody quits trading. Somebody is having his or her first profitable day.

Lessons are learned on a daily basis. If you have had enough days in the markets, those lessons should make you a better trader or investor.

Out of all the lessons I have learned in the financial markets, there has been one constant: The financial markets want you, me and anybody else who attempts to pick fruit from its bountiful tree to tumble from our ladder and break a leg, at a minimum. Death is preferable.

It's one giant psychological mousetrap. Doubt fuels rallies. Fear makes solid bottoms. Greed creates long-term tops. What do doubt, fear and greed have in common? When each is dominant, it tends to be precisely the wrong emotion to suit what's going in the market.



is the new poster boy for this psychological mousetrap in real time. It used to be that



was my go-to stock for a lesson in

how and why the markets do what they do

. But LinkedIn takes things to a new level.

With LinkedIn we have the following:

  • I'm not a member of LNKD. Most of the guys whom I didn't like in high school and college are on there. It seems like a gigantic job board -- maybe with a social angle thrown in so it's not just another HotJobs. On the surface, it doesn't seem like anything special.
  • A nearly $10 billion market cap. By comparison, Netflix has a $13 billion market cap. The only difference is that it took Netflix 10 years to get there in the public markets. LinkedIn did it in one day. Magical.
  • An astronomical valuation no matter what metric you apply: price-to-earnings, price-to-sales, price-to-book-value or price-to-cash-flow. It's extremely overvalued.
  • A very low float, creating extremely volatile trading.
  • Skepticism galore. Just read the headlines. There are more articles about shorting LNKD than anything else.

It is fair to assume that the underwriters knew precisely the type of skepticism that would ensue if LinkedIn had even a mildly successful IPO. It is also fair to assume that they knew that short interest and put-buying would become commonplace in the weeks following the IPO given the amount of skepticism the valuation would be greeted with.

LinkedIn is easily the most important IPO for Wall Street since



came public in 2004. An IPO of LNKD's caliber acts as a gigantic, flashing billboard to other companies thinking about going public. Therefore, the success of such an IPO is paramount for all major institutions on Wall Street.

It's like the first guy who manages to walk across a hot bed of coals during a spiritual retreat. It emboldens those who are waiting in line behind him. Should the first guy collapse in pain, all of the others will be frightened away. The organizer of the spiritual coal walk wants to make sure that the first guy who takes the plunge is successful.

What are the chances Wall Street would put out a product with such a low float, high valuation and skeptical audience in order for it to walk across a hot bed of coals and proceed to fall flat on its face?

Doubting LinkedIn at these levels is doubting Wall Street. Thinking that the valuation of LinkedIn is incorrect here means you think Wall Street is incorrect here. Selling short LinkedIn is selling short the advertising campaign that Wall Street crafts night and day in order to keep the machine running.

LinkedIn is the purest bet on Wall Street that I have seen in sometime. While rebelling against Wall Street is what the cool guys are doing, I'm in this to make money. I am perfectly fine being utterly uncool.

Ali Meshkati is founder of, a Web site focused on investing in restructurings and special situations in micro-cap and small-cap stocks. Prior to Zenpenny, he managed Trillian Capital Partners LP, a top-ranked macro hedge fund. He has been trading the financial markets since 1994, working as an adviser to both individual clients, as well as an institutional trader with Bank of America. He can be reached at