Barclays recently downgraded LinkedIn Corp's shares in a latest research note. The stock was was
taken out in February right after the social networking company presented an unsatisfactory forecast
on revenue and profit.
Business Insider revealed that Paul Vogel of Barclays lowered his rating for LinkedIn to "equal
weight" then cut the price objective to $130 from its $205 price target objective. "Growth, overall, will be slower than we had previously thought and we think the stock now needs to resettle into a newer paradigm around valuation and expectations," he continued.
The report also said that LinkedIn killed Lead Accelerator which focused on business-to-business
network. From that day, the stock dived into 44% which is considered the worst declined ever on
the company's value.
LinkedIn was said to be trading to more than $200 in January. Since then, many analysts have thought that the company is either facing some serious internal problems or it is simply not a high-growth company anymore.
Barclays' Vogel appears to assume that it's a mixture of both. He compared LinkedIn to Pandora and Zynga before in terms of the number of job-seekers it can convert into a premium account. Vogel knew that if an application helps a user in finding a job, the more successful it will be.
Vogel now questions LinkedIn's other decisions after its unexpected decision to get rid of Lead Accelerator. He examines the company's decision including purchasing Lynda last year for the amount of $1.5 billion.
Vogel believes that LinkedIn is now "trending in the wrong direction." He added that this lower
growth and stock price at the present will be permanent. According to Yahoo Finance, LinkedIn's
average price objective is $175. With the hiccups from the past year, Vogel loses faith that the investors will still be willing to give the company the benefit of the doubt.
