Jan. 29, 2014, 4:48 PM
- Several high-flying Internet stocks are getting a lift from Facebook's big Q4 beat, which was accompanied by news the social networking giant's mobile ad sales rose ~4x Y/Y and now account for over half of its ad sales.
- TWTR +4.1% AH. LNKD +2.6%. YELP +2.2%. Z +2%. GRPN +1.6%. SINA +0.7%.
- Google reports tomorrow. Twitter and Yelp are due up on Feb. 5, and LinkedIn on Feb. 6.
Jan. 27, 2014, 12:44 PM
- U.S. and Chinese Internet stocks are adding to last week's big losses, as investors continue taking profits following major 2013 gains. Chinese stocks were hit last week by an emerging markets selloff, weak PMI data, and an SEC ban (pending appeal) on audits from the Chinese units of big-4 U.S. accounting firms.
- Twitter (TWTR -8.2%), the company bears are most likely to point to when arguing a new Internet stock bubble has formed, is headlining the U.S. decliners. Shares are still up 25% from their post-IPO opening trade of $45.10.
- Other U.S. decliners: GOOG -3.1%. FB -2.9%. YELP -5.3%. Z -5.1%. LNKD -4.3%. P -3.2%. ANGI -4.1%. ZNGA -3.1%. GRPN -3.1%.
- Chinese decliners: BIDU -2.9%. CCIH -19%. BITA -14.6%. CTRP -7.4%. NQ -7.9%. LONG -9.4%. DANG -7.3%. SOHU -4.3%. GOMO -5.8%. SINA -3.3%. QUNR -7.7%. SFUN -5.4%. WBAI -7.5%. RENN -5%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Jan. 16, 2014, 11:07 AM
- LinkedIn (LNKD +4.7%) has hired Derek Shen, previously the CEO of Chinese group-buying site Nuomi (now controlled by Baidu), to be the head of its Chinese unit (a newly-created role). Shen will be based out of Beijing.
- The hiring is widely being taken as a sign LinkedIn, whose services (unlike Facebook and Twitter's) aren't blocked in China, will soon be launching a Chinese site. The company currently has an office in Hong Kong, but not on the mainland.
- Several LinkedIn clones already exist in the Middle Kingdom, but none have taken off the way LinkedIn has in the U.S. and certain international markets. Government agency CNNIC estimates China had 617.6M Internet users at the end of 2013, and 500.1M mobile Internet users. Just 4M of LinkedIn's 259M registered users are currently in China.
- Shares are now up 14% from the near-term bottom they set on Jan. 7, following a BofA/Merrill downgrade.
Jan. 9, 2014, 1:50 PM
- Cowen's John Blackledge is the latest analyst to issue a bearish opinion on Twitter (TWTR -4.9%), starting coverage with an Underperform and $32 PT. After opening higher, shares are adding to their recent losses, and are now down 17% on the week.
- Blackledge (unsurprisingly) takes aim at Twitter's valuation, and also reports a survey of 50 ad buyers suggests Twitter's ad ROI is worse than Facebook (FB -1.7%) and LinkedIn's (LNKD +2.3%). ~60% of respondents claimed Facebook delivered the best ad ROI, ~25% said LinkedIn did so, and only ~5% picked Twitter.
- RBC offered a more upbeat take last month, stating 40% of polled Twitter advertisers have seen improved ROIs over the prior six months, and that a similar number have increased their Twitter spend.
- Much like Facebook in 2012/early 2013, Twitter has been busy rolling out a barrage of new ad products, as it works to provide better targeting and improve its ad revenue per 1K timeline views from a Q3 level of just $0.97 ($2.58 in the U.S., $0.36 internationally).
- Cantor and Morgan Stanley have already cut shares to Sell this week, with each naming valuation among its reasons for being bearish.
Jan. 7, 2014, 9:55 AM
- LinkedIn (LNKD -1.5%) has been cut to Neutral by BofA/Merrill. Other sell-side firms have aired cautious notes in recent weeks.
- Workday (WDAY +2.9%) has been upgraded to Buy by UBS.
- Glu Mobile (GLUU +4.1%) has been upgraded to Buy by Craig-Hallum.
- IGT (IGT -0.8%) has been cut to Hold by Argus.
- STMicroelectronics (STM -2.7%) has been cut to Underweight by Barclays.
- 8x8 (EGHT +2.2%) has been started at Buy by Needham.
- Nimble Storage (NMBL +1%) has received three bullish ratings and three neutral ones on underwriter coverage day.
Jan. 2, 2014, 10:06 AM
- Citi's tracking data leads it to think LinkedIn (LNKD -3.4%) will at best provide in-line results and guidance when it delivers its Q4 report (likely later this month).
- ITG Research offered a cautious view on LinkedIn's Q4 two weeks ago. The company's ad business (23% of Q3 revenue) has been seeing relatively slow growth, something generally blamed on a transition to news feed ads (a shift towards mobile viewing could also be playing a role). But LinkedIn's jobs/recruiting and premium subscription businesses have continued to post 60%+ growth.
Dec. 31, 2013, 6:54 PM
- Teen engagement worries or not, Facebook (FB) is still the unquestioned colossus of the U.S. social media scene. A Pew survey (.pdf) of 6,010 Americans found 71% claiming to use Facebook, up from 67% in 2012. That compares with 22% for LinkedIn (LNKD - up from 20%), 21% for Pinterest (up from 15%), 18% for Twitter (TWTR - up from 16%), and 17% for Facebook-owned Instagram (up from 13%).
- Facebook's success at reeling in older users has helped it continue growing: 45% of respondents age 65 or older said they use Facebook, up from 35% a year ago. 63% of users say they check in daily, and 22% weekly.
- Unsurprisingly, Twitter and Instagram's user bases skew young: 31% and 37% of respondents in the age 18-29 demographic respectively use Twitter and Instagram, compared with 9% and 6% in the 50-64 demographic. 46% of Twitter users say they check in daily, a level notably below Facebook's 63% and Instagram's 57%.
- A mere 13% of LinkedIn users claim to check in daily, evidence the company's efforts to boost engagement need more work. But the platform is used by 38% of respondents making over $75K, and 27% of all employed respondents. LinkedIn's recruiting and ad clients will be happy to know that.
- North America accounted for only 17% of Facebook's Q3 MAUs, but produced 48% of its Q3 revenue. The U.S. accounted for 74% of Twitter's Q3 revenue, and 62% of LinkedIn's.
Dec. 24, 2013, 2:13 PM
- With LinkedIn (LNKD +0.1%) now in possession of 250M+ user profiles that amount to partially or fully-completed resumes, the company is setting its sights on analyzing and mapping patterns within its user data to give employers more advanced tools for finding the right candidates.
- LinkedIn exec Dan Shapiro says a pending product will rely on algorithms to uncover important patterns in hiring activity to spot valuable candidates, much the same way Google's PageRank search algorithm relies on links between sites to determine useful search results. "We are due a complete increase in the sophistication of the talent marketplace like we saw in the financial marketplace 50 years ago."
- Over the long run, LinkedIn's plans for its data could extend even further. CEO Jeff Weiner has said LinkedIn wants to "develop the world’s first economic graph," and thereby "map the global economy and and every economic opportunity in the world."
- LinkedIn's Talent Solutions business accounted for 57% of the company's Q3 revenue; sales rose 69% Y/Y during the quarter.
Dec. 18, 2013, 10:51 AM
- ITG Research, which only last month reported LinkedIn's (LNKD -5.2%) Q4 was tracking well above consensus, now says checks indicate the business social networking leader has seen "unexpected deceleration in order volume."
- LinkedIn has already provided subdued guidance the last two quarters. Though the company's recruiting/jobs and subscription sales have remained strong, its ad sales have been pressured by a transition to selling news feed ads.
- Shares are still up 85% YTD, but down 18% from their September 12 high.
Dec. 10, 2013, 1:34 PM
- Though still generally below their mid-October highs, Internet momentum stocks are turning in what might be their best performance during a rally that has now lasted two weeks. While Twitter (previous) is the star of the show, Facebook (FB +3.5%), Yelp (YELP +1.8%), Groupon (GRPN +4.7%), Netflix (NFLX +2.1%), LinkedIn (LNKD +1.4%), and Pandora (P +3.4%) aren't getting left out.
- Several Chinese Internet names are also higher. In addition to Baidu, which is benefiting from a bullish Pac Crest note, Sina (SINA +6%), Ctrip (CTRP +6.1%), Qunar (QUNR +6.3%), and Youku (YOKU +3.9%) are staring at big gains.
- Morgan Stanley's Scott Devitt is out with another bullish note on Groupon. Devitt notes an MS survey of 358 SMBs found only 26% of merchants have run Groupon deals in the last 12 months, something he thinks suggests there's "a long run way of merchants" that can still be signed up.
- He also sees room for Groupon to improve its customer targeting - the company still isn't able to track which deals were shown to customers, or were clicked on, in prior e-mails - and expects its new site (allows deals to be browsed without an e-mail address being given) and a revamped e-mail layout to boost growth.
Dec. 9, 2013, 4:56 AM
- Google (GOOG) and Microsoft (MSFT) are among eight technology giants that have started a campaign to limit government online surveillance. The other companies are Apple (AAPL), Yahoo (YHOO), Facebook (FB), Twitter (TWTR), AOL (AOL) and LinkedIn (LNKD).
- The move appears to represent an attempt by the companies to prevent a loss of business because of Edward Snowden's revelations about the scope of the National Security Agency's spying campaign. Forrester estimates that the disclosures could cost the U.S. cloud computing industry $180B by 2016.
- While the firms want limits on governmental authority to collect user information, as well as increased oversight, given the tech industry's own data practices, some might say that there's more than a whiff of the pots calling the kettles black.
Dec. 6, 2013, 7:14 AM
- "Management has discussed [the China launch] previously, and we learned from a separate NDR with MDC Partners that one of their agencies has been hired to begin a public relations outreach for LinkedIn (LNKD) in China," says analyst Daniel Salmon, upping the stock to a Buy with $235 price target. "We assume a formal launch in 2014, with monetization beginning to ramp in 2015."
- Salmon's team also likes LinkedIn's increasing focus on salespeople (LinkedIn believes there are 6x as many in sales on the platform as there are HR personnel), with a stand-alone product expected to ramp in 2015.
- "We also expect the hiring of Penry Price to lead ad sales to improve the relationship with the agency community; some ad products will likely be culled and a continued heavy focus on Sponsored Updates is expected."
- Shares +1.6% premarket
Nov. 15, 2013, 10:37 AM
- Stifel's LinkedIn (LNKD +4.6%) PT represents a 29% premium to where shares currently trade, and a 161% premium to where they traded to start the year. It also equals a valuation of $33.6B, or 135x consensus 2014 EPS.
- Analyst Michael Purcell gushes with praise for the professional social network, declaring it's "evolving into a critical daily or weekly platform for professional workers of all types," and will "remain pivotal in the increasingly complex forces of global business expansion and labor."
- Sell-side commentary on LinkedIn has been quite bullish lately. ITG Research recently reported LinkedIn's Q4 was tracking above consensus, and Needham has reiterated a Buy and $280 PT following an upbeat investor meeting with CFO Steve Sordello.
- Among other things, Needham is upbeat about LinkedIn's Sales Navigator social selling tool (just beginning to ramp), and notes management sees many HR opportunities, including training and performance management.
- Needham: "The holy grail is to recruit, train and measure the effectiveness of employees all through one platform." Such an offering could put LinkedIn into competition with a variety of cloud HR software firms, such as Workday, Ultimate Software, and Cornerstone OnDemand.
Nov. 13, 2013, 3:49 PM
- Six days after dropping in the face of Twitter's strong debut, high-flying Internet names are rallying in the wake of Chinese microblogging leader Sina's Q3 beat and strong Q4 guidance.
- The day has also seen a dismal IPO from online textbook rental leader Chegg, a WSJ report of a rejected $3B+ Facebook offer for Snapchat, and a vague afternoon rumor about M&A interest in Trulia from Realogy.
- U.S. standouts: ZNGA +7.4%. LNKD +4.8%. P +3.3%. ANGI +2.6%. GSVC +4.1% (owns a Chegg stake).
- Chinese standouts: QIHU +8.9%. SFUN +7.5%. LITB +6.4%. YY +6.9%. CYOU +6.3%. QUNR +5.7%. CTRP +3.7%.
- Baidu (BIDU +1.4%) is up moderately following news Chinese online video rivals Sohu (SOHU +1.7%) and Youku (YOKU +3%) have joined the MPAA and various entertainment/media companies in suing it for piracy. The assorted parties accuse Baidu of enabling piracy through its video search engine, as well as through video player apps and a TV dongle.
- The suit comes as Baidu ramps its content spending for its iQiyi and PPS video sites.
Nov. 7, 2013, 11:48 AM
- Even as Twitter blasts off to a $25B valuation following its much-hyped IPO, U.S. and foreign Internet stocks are giving back some more of the massive 2013 gains that have led many names to trade at steep multiples.
- One sign investors in this space are in a profit-taking mood: Zillow (Z -4.3%) and YY both sold off yesterday in spite of delivering Q3 beats (I, II) and above-consensus guidance; Zillow is adding to its losses today. Likewise, SouFun (SFUN -5.4%) has turned negative after providing a Q3 beat and strong guidance.
- Notable U.S. decliners: FB -2.4%. LNKD -2.8%. GRPN -4.7% (reports after the close). ZNGA -2.7%. P -3.8%. TRLA -5.4%.
- Notable foreign decliners: BIDU -2.4%. QIHU -6.7%. SINA -5% (generally viewed as the Chinese Twitter). DANG -6.2%. VIPS -7.7%. RENN -4.2%. AMAP -4.7%. CTRP -5.7%. YOKU -5.6%. RENN -4.2%. YNDX -5.1%. MELI -2.4% (plunged yesterday thanks to a Q3 miss). SIFY -2.6%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Oct. 29, 2013, 4:45 PM
- LinkedIn's (LNKD) Talent Solutions (jobs) revenue rose 62% Y/Y in Q3 after rising 69% in Q2, and now makes up 57% of revenue. Subscription sales (20% of revenue) were also healthy, growing 61% after rising 68% in Q2.
- Marketing Solutions (ads, 23% of revenue) remain a relative laggard thanks to the transition to news feed ads: sales grew 38% Y/Y after rising 36% in Q2. Though no explanation is given in the PR for LinkedIn's below-consensus Q4 guidance, ads were blamed for the company's light Q3 guidance in July.
- U.S. sales made up 62% of revenue, unchanged Q/Q. EMEA was 23%, Asia-Pac 8%, and the rest of the world 7%. Much like Facebook and Twitter, LinkedIn's international monetization continues to notably trail its U.S. monetization on a per-user basis.
- Registered users +9% Q/Q and +39% Y/Y to 259M. ComScore estimates PC unique visitors and page views respectively fell by 1M and 100M Q/Q to 142M and 11.6B (after factoring mobile, total growth was almost certainly positive).
- LinkedIn continues to spend aggressively: sales/marketing spend +60% Y/Y to $133.2M, R&D +46% to to $106.2M, G&A +86% to $61.8M. Nonetheless, LinkedIn now expects 2013 adjusted EBITDA of $364M, above prior guidance of $340M-$355M.
- Shares -3.2% AH. Q3 results, PR, slides.
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