- Linkedin (NYSE:LNKD) and Facebook (NASDAQ:FB) have significantly diverged over the last three months with former down nearly 15% and the latter up nearly 25%.
- For all the post IPO fallout of FB shares being overvalued the running outperformance by LNKD has been nearly erased.
- Credit the FB management team, including Mr. Zuckerberg, for addressing the changing landscaping and looking to monetize new channels for social networking. I suspect ultimately the retail, casual user market offers far better commercial avenues for FB to exploit than LNKD. Therefore I would suspect the FB will continue to outperform.
We recommend a pair trade going long FB and short LNKD with equal market value.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.