F.T.W.S.I.J.D.G.I.G.T.

(For those who say I just don’t get it….get this!)

Yesterday I was speaking with a colleague and the topic of Microsoft™ buying LinkedIn™ was of course front and center. It became clear early on except for a few other details, I had already said all I needed to say. The only difference this time were my earlier points were being repeated, just not by me.

More often than not I heard “Didn’t you say something like……” or “If I remember right. I remember you saying….” I couldn’t help but laugh to myself as we talked, for the line “It’s different this time” kept appearing in my mind. Yes, it sure is, isn’t it?

Although I really have nothing further to add I would like to throw in something I read over at Zero Hedge™ which I believe sums up things pretty succinctly. To wit:

“The acquisition takes the LNKD price back to that February earnings announcement when LinkedIn’s stock price plunged over concerns its growth had sharply slowed. In agreeing to the MSFT deal, LNKD implicity admits that all those concerns were founded as it would not agreed to this deal, and its 50% premium if it expected a return to growth rates which the market was priced in when LNKD was trading at $292 last year.”

That line says about all one needs to know as for the current state of “The Valley.” And remember: it’s reported some 40% of LinkedIn employees are currently heavy with stock and/or options as compensation for salary. Without this deal (or some other form of manna) the fear was an up and coming exodus aka “a brain-drain” by both talent leaving, as well as the inability to recruit. Say what you want, but I’m of the opinion any of those seasoned looking to work for “the next big thing” probably came from a previous “Microsoft” like acquisition. Where do they go now? Twitter™?

The good thing here at least is for those looking to leave now that “the sclerotic is once again consuming the stunted” presumably will already have their resumes posted. The bad thing will be if the HR departments they’ve been selling all that information – is running some form of “T3000 Robo-Resume-Reader and Screener ” which still runs on an older version of Windows™for fear of updating.

Or, they themselves can pay up for a “premium search’ or ‘resume rewrite” at a discount. After all, isn’t that pretty much what LinkedIn was to begin with? A glorified jobs board to sell posters information? I wonder how they’ll assess the benefits of this service now that some may have to use it – rather than sell it. But I digress.

And for those who may be new, or just want a refresh on some of what I’ve stated about LinkedIn over the years, here’s a post from back in February when their stock price went “Ka-Pow!”

From the article “A Few Past Links To Link Up My Thoughts On LinkedIn” To wit:

As the news of the day will certainly contain the debacle being witnessed in the share price of LinkedIn™ this morning, I thought I’d post a few quotes and previous links to articles where I warned of exactly what has taken place for newer readers. There are more but these cover the pertinence of the theme. To wit:

From the article “Linked Into What Exactly?” February 14, 2013

“Here’s something I know first hand from real people. Every single entrepreneur or business owner I know has either never visited the site again after signing up. Or, stopped responding to invitations of linking because; not one of these ever resulted in a worth while business opportunity. Ever!

I know some that have posted directly onto their info the equivalent of “No collaboration offers need apply.” Because that’s all they’ve ever received. Offers of collaboration that resemble offers more in line with letters from a Nigerian Prince. When they ask me what I did with my account and I say: “I deleted it.” the most common response I get is: “Yeah, I think I’ll do the same next time I remember. Only for not remembering is their info still there.”

From the 4 part series “Gauging The Gauges” January 9, 2014

“I have stated for years: “The only ones making money from social media, are the ones selling people the idea they need social media.”

Just look to, or remember all those stories that are consistently thrown across the financial media and others. All those buzz terms like: “user generation, followers, likes, connections,” and more? All touted as “The” metrics of relevancy for anyone using or purchasing. Now? Seems what’s needed for tangible, reliable, clear metrics is moving from the asking stage – to the demanding stage.”

From the article “Welcome To A New Normal Earnings Season” October 7, 2014

“With the Federal Reserve’s QE policy set to end this month all these “new economy” juggernauts are going to have to prove that giving away the store for “free” as to entice users, customers, and more; will have to prove they have the ability along with the quantifiable hard numbers accompanied by real “cold cash” they can pay those promised returns to Wall Street.

If this proves to be the case the term “trap door” will not be used in reference to some new gaming app available. It will be to describe serious consequences to people who assumed investing in these markets has been nothing more than a game to be played by “players.”

Just watch how fast the “players” in the world of algos and High Frequency Trading can change the meaning of “liquidity trap” when they decide – it’s not in their best interest to play.”

From The article “To Social Media’s Horror – It ‘is’ Different This Time” August 2, 2015

“Or maybe you’re one that couldn’t wait to sink your 401K teeth into LinkedIn™.  Once again, after years of pushing higher, and higher, it seems the new story is same as the “old story.” i.e., They seemingly needed to spend money as to gain potential “integration opportunities” by buying something (e.g. $1.5 BILLION for Lynda™) rather than investing directly and maximizing everything of what LinkedIn currently is involved in. i.e., A glorified resume writing and/or job seeker data base.

In other words: They can’t make money via the old model as to warrant their current valuations. So, instead of doing what they do, and doing it better, enabling higher net profits. It seemed they had better buy something that can. Even if the price paid (again a reported $1.5 Billion) is money spent not from net profits – but from Wall Street’s pocket.”

As I write this (in the pre-market) LinkedIn’s stock price overnight has plummeted by over 30%. That’s not a typo.

If you are one of the fortunate to have not owned any shares currently – I want you to think about it this…

Exactly how do you think this latest debacle is going to be viewed by anyone who still owns shares or, is holding them in lieu of a salary in the now myriad (Twitter™, Square™, LinkedIn™, Pandora™, etc., etc.) of value purging, net worth shattering “social darlings?”

Add to that: How do you think the people not only currently working in these “social darlings” but rather; the ones hanging their hopes and dreams of “Silicon Valley” riches that maybe living in some shipping container as they await their envisioned “payday” to arrive? How do you think this latest debacle will be viewed in connection with all the others as of late?

And what about the “investor class?” What do they now do? Remain invested? Invest even more? (Whether in these or any others.) Truly think about that. For suddenly “On sale at great prices” has morphed into “Do you dare to catch the falling knives?” and now “Will I be solvent by morning?”

But not to worry I guess. After all, Mark Zuckerberg just touted for the $19 BILLION dollars he spent of Wall Street’s money for WhatsApp™ it now has 1 Billion users. Doesn’t make a net profit or anything close, but hey, it’s all about eyeballs, right? Money and profits are secondary unless – Wall Street comes back looking for their promised riches. And they always come looking. Sooner, or later. Don’t they.

© 2016 Mark St.Cyr