Even relatively new growth investors should be able to see how this one-two punch of negativity could trigger a massive sell-off in LinkedIn stock. Understandably, alarm bells sounded among many growth investors who focused on the news of slowing growth for what has historically been a richly valued stock. Analysts had expected EPS of $3.65 on sales of $3.9 billion. Specifically, LinkedIn said it anticipates earnings between $3.05 and $3.20 on a per share basis, with revenues coming in between $3.6 billion and $3.65 billion. The firm partially missed analyst estimates and issued FY 2016 guidance well below analysts' mean estimates. Though this may sound like short-termism, LinkedIn violated a cardinal rule for growth stocks. In fact, LinkedIn's 44% single-day decline on February 5 th singlehandedly reversed its all-time trading performance from outperforming the Nasdaq Composite index to underperforming the index during its tenure as a public company. Looking at LinkedIn, the most striking thing is the massive sell-off that took place over the last 12-months, particularly after the company's disappointing Q4 2015 earnings report in early February. However, down but far from out professional social network LinkedIn has all the makings of a phoenix primed to soar once more from its ashes. Many names that suffer this well-worn fate never regain their former swagger. ![]() The annals of growth investing are replete with examples of flash-in-the-pan names that soared only to subsequently sink from the weight of the optimism that helped fuel their rise. In the highly volatile world of tech investing, fortunes can disappear as quickly as they are built.
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