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As we've seen in the past few years, not all social media stocks have been successful investments…
Online game-maker Zynga Inc. (Nasdaq: ZNGA) started trading at $10 a share in 2011, then tumbled 7.75% to $9.25 in just four hours of trading. It never recovered, and in June, the company announced it was cutting 520 jobs. Now Zynga shares are trading at $3.69, compared to a high of $14.69.
Daily deal provider Groupon Inc. (Nasdaq: GRPN) raised a total of $700 million in its 2011 initial public offering (IPO), increasing its offer of shares from 5 million to 35 million. But the two years since have proven less than fruitful for Groupon – shares have fallen by more than 55%. Earlier this year, its chief executive officer/co-founder Andrew Mason was let go.
Facebook Inc. (Nasdaq: FB) is sitting pretty now, but it didn't start out that way. The Facebook IPO was an unmitigated disaster, losing over half of its value within six months of listing. On top of that, it was priced at 107 times trailing 12-month earnings, making it pricier than 99% of all companies in the S&P 500 at the time.
Defense & Tech Specialist Michael A. Robinson has seen a lot of tech companies like these come and go over his 30 years as a leading analyst.
But there's one he's convinced is here to stay.
"LinkedIn is the clear leader in the social media sector. Every headhunter and corporate recruiter I know says this website is absolutely vital to the way they do their jobs," Robinson told readers in Strategic Tech Investor earlier this month.
The Case for Investing in LinkedIn (NYSE: LNKD)
Professional networking company LinkedIn Corp. (NYSE: LNKD) hit the market in 2011. Its shares were priced at $45, and raised $352 million; on opening day, shares rose over 100%.
Now, two years after its IPO, LinkedIn has almost quadrupled in value.
What's the secret to LinkedIn's staying power?