LinkedIn third-quarter loss disappoints investors
LinkedIn recorded its first quarterly loss since the online professional network's initial public offering in May.
The loss wasn't as steep as some analysts had predicted, but the stock fell as much as 8% in after-hours trading. It came as the company increased spending on research and development to attract more users around the globe.
LinkedIn lost $1.6 million, or 2 cents a share. It had earnings of $4 million, or 2 cents, in the third quarter of 2010. If not for certain items, LinkedIn said it would have earned 6 cents a share. Revenue more than doubled from last year to $139.5 million, more than the $128 million analysts had forecast.
Total operating costs more than doubled to $134.9 million as LinkedIn opened an office in Tokyo and bought IndexTank to improve search on its site.
This is an especially important quarter for LinkedIn because employees and other insiders can begin selling their shares starting Nov. 21. Investors may be nervous that the end of the lockup will usher in a tidal wave of sales that could cause the stock to drop.
LinkedIn made its hotly anticipated public trading debut before the economic turbulence that has delayed the IPOs of other Silicon Valley companies such as social gaming company Zynga. As such, it's a bellwether for the sector. Groupon, the daily deals company, is set to price one of the year's most closely watched IPOs on Thursday.
LinkedIn maintained its pace of adding about two new members a second, finishing the quarter with 131.2 million members. It continues to trade at about twice the $45 price it fetched at its IPO. It also hosted a town hall meeting on jobs with President Obama last month.
LinkedIn said Thursday that it has filed a registration statement with the SEC to sell more stock. The company said it planned to use the proceeds for "working capital and general corporate purposes."
-- Jessica Guynn
Photo: LinkedIn founder Reid Hoffman, center, and CEO Jeff Weiner, right, applaud after the opening bell at the Big Board as the company goes public. Credit: Mike Segar / Reuters