LinkedIn’s Monday: Security Flaw, Stock Slide

LinkedIn is getting hammered today as investors already edgy over European debt problems are bidding down the stock that last week had a stunning runup when it made its public debut.

While the Dow is off 151 points in early afternoon trading in New York — 1.3 percent — LinkedIn is selling at just under $86, a drop of 7.2 percent from Friday’s $93.09 close.

Since hitting a high of $122.70 on its first trading day last Thursday, LinkedIn has become the poster child for Internet bubble talk. A Sunday New York Times story about the company began, “What are shares of LinkedIn really worth?”

The conclusion? Probably not the $9 billion valuation investors gave the company last week. The stock benefited from investor fascination with all things social.

This morning, Indie Research, an independent research service, picked up on the Times story and riffed on the high valuation theme. It got wider circulation than it might when Yahoo Finance picked it up.

Meanwhile, a security consultant in India Sunday posted a blog note about LinkedIn’s cookies posing a potential risk. It’s not as potentially serious as when hackers broke into the Sony PlayStation network and stole millions of bytes of personal information, including credit card information.

Article Continues Below

However, Rishi Narang reported, wrote on his blog that LinkedIn cookies remain active for a year, giving hackers a big window to capture the information and use it to access accounts. The cookies themselves are not sent securely, so hackers might be able to capture them using so-called sniffing tools.

While credit card information is probably not at risk, Narang said he captured the access information for some LinkedIn users and could have altered their profile information or manipulated other parts of their online presence.

Reuters reported LinkedIn officials said the company was preparing to offer additional security on an opt-in basis that would include encrypting the cookies.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

Topics

2 Comments on “LinkedIn’s Monday: Security Flaw, Stock Slide

  1. Hmmm. I read that for many companies a stock with a price/ earnings ratio of 10-17 is for a fairly priced stock. At the May 19th stock price high of $122.70, that puts LinkedIn’s Price-to-Earnings ration at a mind-numbing 1460…… “Bubble, bubble, toil, and trouble.”

    ===========================

    http://wallstcheatsheet.com/stocks/linkedin-now-has-a-price-earnings-ratio-making-pets-com-blush.html/

    If you were playing stocks in 1999, the LinkedIn (NYSE:LNKD) IPO should be causing flashbacks that would make a Woodstock attendee blush. The social media company has just launched the largest initial public offering since Google (NASDAQ:GOOG), but the insanity is much more intense.
    If you thought LinkedIn was fully valued at $45, you’ll really hate it at over $100. Yup. I said $100. That’s where it’s trading as the momo morons keep trading this stock higher on Day 1 of trading.
    With 94.5 million shares and $8 million in net income (pro rated annualized), LinkedIn earns $0.84 a share. At today’s stock price high of $122.70, that puts LinkedIn’s Price-to-Earnings ration at a mind-numbing 1460. Pets.com is blushing in its grave.
    In fact, within a few hours of the initial public offering, LinkedIn (NYSE:LNKD) already made the list of The Top 10 IPO Stock Performers This Year. Whether they remain on the list is another story.
    The WSJ notes: “The company expects its revenue growth rate to slow and warns that it won’t be profitable in 2011 as it invests in what it calls future growth, such as technology and product development. It also warns that it expects that its results in the future could become more cyclical and seasonal.”
    Party poopers! Don’t let all that stuff about slowing growth distract you from the euphoria of watching a ticker spike. Just tell those old fogies to look at what happened to everyone who chased the dotcom stocks in 1999. Oh, wait. That ended badly. Well, never mind. Enjoy the show.

Leave a Comment

Your email address will not be published. Required fields are marked *