|
|
|
|
Mish's Global Economic Trend Analysis |
LinkedIn Mania Over? Shares Plunge 21% After Hours on Earnings Miss Posted: 30 Apr 2015 07:38 PM PDT It's tough predicting the end to manias. Tonight I ponder a 21% plunge in extended hours trading in LinkedIn. Is the mania over? Please consider LinkedIn Plunges as Second-Quarter Forecast Misses Estimates. LinkedIn Corp.'s shares plunged as much as 27 percent after the company delivered quarterly revenue that missed analysts' estimates for the first time, shaking confidence in a historically stable business plan.Mania in Pictures Blame Game LinkedIn blamed the plunge on strength in the US dollar. It generates 39% of its revenue outside the US. For the trailing 12 months, linked in lost money. The loss widened from 11 cents a share to 34 cents a share. It has no PE because it has no profit. Market Cap Prior to this plunge, LinkedIn had a market cap of $31.74 Billion. Why? On the theory that everyone in the world will link to everyone else in the world. I see no value in paying anything for such services. If others come to the same conclusion, I wonder if LinkedIn will ever turn much of a profit. Premium Services Every week or so I get an offer to try LinkedIn premium services for free. I never respond to these offers and never will. My personal policy on LinkedIn is to accept every invite I get. Why? Because it cannot possibly hurt. Perhaps someday it helps. Perhaps not. I have a an amazingly eclectic LinkedIn group. But to communicate with anyone, you have to do it through LinkedIn unless you get their email address. That's part of the model, but it also sucks. Profiles I have two profiles, one by accident. I set them up under two different email addresses, not realizing I already had a profile. I wanted to merge them, but the procedure was absurd. I do not want to delete and do a mass invite. I just looked again tonight. They finally addressed this issue in August of last year (See Merging Accounts). So, if you sent me an invite, and I did not respond, it is likely because you found my inactive profile to which I do not even know my password. Try again in a week or so, and hopefully I will have this fixed. LinkedIn Mania Over? Is the mania over? It's hard to say. The LinkedIn business model may very well be viable, but not if it loses money, and it is struggling to make any. Can it make enough to support a $32 billion market cap? I highly doubt it. I expect to see this company trading once again at $50. Heck, $10 would not surprise me in the least. The thing is, stocks generally peak on good news not bad. So maybe more mania is on the way. Don't count on it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Employment Compensation Costs (Wages and Benefits) Jump in First Quarter Posted: 30 Apr 2015 12:34 PM PDT A BLS report out today shows Compensation Costs up 0.7% December 2014-March 2015 and 2.6% over the year ending March. Civilian WorkersPrivate Industry Compensation Percent Change From Year Ago click on chart for sharper image Private Industry Wages Percent Change From Year Ago Employment costs have risen. Expect an even bigger jump in upcoming months now that Walmart and McDonald's voluntarily hiked wages, and some cities and states raised the minimum wage as well. Extra money in people's pockets is a good thing, but it will hurt corporate earnings and dampen enthusiasm for hiring and adding stores. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
Initial Unemployment Claims Plunge to 262,000 - Lowest Since April 2000; What's Going On? Posted: 30 Apr 2015 10:14 AM PDT Initial unemployment claims plunged to 262,000 today bettering the Bloomberg Consensus. Initial Unemployment Claims Initial Unemployment Claims 4 Week Moving Average Initial claims are in the basket of leading indicators. Blue boxes show four occasions where claims turned up strong and no recession occurred. Red boxes show four occasions where claims turned up and a recession followed later. The purple boxes show two occasions where claims bottomed just as recession started. I suspect the next turn higher, whenever it occurs, is likely to be significant. There will not be much of a warning. Other data suggests a recession may have already started. Explaining the Low Numbers Reader Tim pinged me with this thought on the numbers. Hello MishObamacare Effect Tim refers to the classification of a full time job as 30 hours under Obamacare. In response, many fast food and retail stores slashed worker hours to 25 or less forcing those workers to take on second jobs. This inflates the strength of the job reports and the initial unemployment claims reports as well. Because of all the multiple part-time jobs people hold, there may not be much of a jump in claims when the recession starts. It's possible there is no jump at all, just cutbacks in hours. For discussion of the idea a recession may have already started, please see Real Q1 GDP 0.2% vs. Consensus 1.0%; Disaster in the Details. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. |
You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
Google Inc., 1600 Amphitheatre Parkway, Mountain View, CA 94043, United States |