Investment Idea: LinkedIn (LNKD)
Professional networking website, LinkedIn, is a stock that fills me with regret. I bought this stock while I was very new to stock investing and had only a vague idea as to what value investing was. My ‘value investing’ strategy was to invest in big name stocks when they fell hard from bad news, it worked to some degree, finding success in Netflix (NFLX) and Tesco (TSCO.L). I bought LNKD stocks back in April 2015 after some bad news caused the stock price to drop from around $250 to $200, which was the price I bought at.
After properly researching value investing a few months later, I decided that LNKD was overpriced. I should have sold at that point, and I had multiple chances to do so including a stint in November 2015 where the stock hovered above $250. However I got greedy, and held onto it thinking it could go higher (important lesson on investor psychology!). Instead of going higher, the stock dived to $100 after unfavourable results. It was pretty depressing that I had gone from a 25% gain to a 50% loss. At this point, I decided I may as well hold onto the stock. This paid off in June 2016, when the stock rocketed up to around $193 on the news of Microsoft’s acquisition at $196 per share.
Since then, the stock has mostly been hovering between the $190 and $193 mark. However recently, I assume due to election uncertainty in USA, the stock has been drifting lower (along with the rest of the market), as low as $187.35 yesterday. With Microsoft paying $196 per share, and the deal supposedly closing by the end of the year, the stock should hopefully return 3.9% on the $188.58 which I paid for. In two months, this is an annualised return of 26%, pretty decent. I like to aim for 10% annual return on investment, so with that in mind, plus the fact that these deals can sometimes take a little longer than expected to close, I think LNKD is a buy below $191. If buying, take note of any transaction fees, as that may be a higher proportion of any gains you make.
I did something similar where I bought shares from a company pending being acquired with a company CTC Media (CTCM) which I wrote about here.
I own shares in LNKD. Please note that I am not qualified to give financial or investment advice. This post is my opinion and should not be taken as a de facto recommendation (as with any stock advice from any source!).












