If minuscule profits, dreamy valuations and a dated platform weren't good enough reasons for some LinkedIn (LNKD) shareholders to join the exodus of insiders and major shareholders out of the company stock, the new monster in town may very well provide 70 million new reasons.
That new monster has been identified as... well, "Identified"! Rolling into town less than 3 months ago (the Beta version was launched on September 20th), it has already taken on 70 million professionals or more than half of what LinkedIn achieved in eight long years. What may spook LinkedIn investors even more is the fact that half of that monstrous growth happened just in the past two weeks, according to the news release by Identified.
Projecting Identified's growth into the future, using a conservative linear growth curve, rather than an exponential one, LinkedIn can very well be LinkedOut within two months, as Identified's database of professionals will surpass its own. That time frame will coincide with LinkedIn's next quarterly report and the end of the lock-up period for its secondary offering - a very potent and dangerous combination of factors for LNKD's share price.
Surprisingly, the knock-out punch to LinkedIn does not come from Identified's 70 million users or their astronomical growth, but instead, from Janet Ryu's departure from the company to join... you guessed it, Identified. Janet was the product manager for the only two good and useful features of LinkedIn - "People you may know" and "who has viewed your profile." She joins other key personnel recently snapped-up from Facebook, Career Builder and elsewhere according to the Identified news release.
And as the count to 10 continues for LinkedIn, Identified is expected to keep "scoring" (a score is assigned to each individual based on their experience and industry demand) all the way to 135 million. And of course, the old Monster (NYSE:MWW) still lies dormant, but boosted by frequent take-over rumors and ready to strike at any time.
Disclosure: I am short LNKD.
Additional disclosure: I may initiate additional short positions on LNKD and long positions on MWW within the next 72 hours.