As LinkedIn’s post-IPO lockup ends next month, CEO Jeff Weiner on Friday eased concerns about a majority of those shareholders that will be allowed to sell their stock.
Of the 55 million shares that will become eligible to trade at the end of February, Weiner said, about 48 million shares are held by cofounder and executive chair Reid Hoffman, founding investors Greylock and Sequoia, Bessemer and other long-term investors and senior executives.
“All five of those constituents have been thus far to date, long-term and committed shareholders,” he said in an exclusive “Fast Money” interview.
Thursday, the company reported inaugarual earnings that beat Wall Street expectations.
Weiner fielded a question about LinkedIn’s valuation, which is more than 150 times earnings forward P/E.
“I’ve said it in the past; I would say it again: We leave the valuations to the marketplace. We focus on executing our plan. We focus on our fundamentals. And if we get that right, over the long term I think the valuation will take care of itself,” he said.
As to the idea that a tech bubble exists, Weiner sounded bullish.
“To some extent, I think if you spoke to some analysts who are covering these companies, they’d tell you that the premium valuations in multiples that some of these companies enjoy are based on their growth rates and the prospects ahead of them,” he said. “And that’s why it’s so important for the segment to focus on the long term.”
As Facebook heads toward a $5 billion IPO, Weiner did not appear to be concerned that a potential competitor would emerge.
“It’s really an apples-and-oranges comparison,” he said. “Context matters in our area of work. We focus on professionals exclusively, and I think that has served our membership very well. Facebook is a much broader social-utility platform, and the usage there tends to be of a more personal nature between friends, family, et cetera.”
Shares of LinkedIn closed up 17.8 percent at $89.96.
Among the “Fast Money” crowd, it was tough to find a buyer.
“I think that forward P/E is the biggest concern among the investment community,” said Steve Grasso of Stuart Frankel. The lockup period was also a major issue, he added, but “I think he squashed those concerns.”
Grasso noted the stock was trading in the middle of the 52-week range.
“I missed this trade,” he said. “I wouldn’t be a buyer here.”
“Even assuming they stay on course, a lot of that upside is already in the stock at this point,” Evercore Partners analyst Ken Sena said earlier.
Zach Karabell of RiverTwice said the volatility was cause for concern.
“Unless you’re in this because you believe in the business model, I don’t think you really should be in this for a trade,” he said.
Anthony Scaramucci of SkyBridge noted its EPS, which was 12 cents, compared to its $89 per share stock price.
“That’s the only thing I’m going to say,” he said. “Please be careful.”
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Trader disclosure: On Feb. 10, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Scaramucci is long AAPL; Scaramucci is long C; Scaramucci is long GS; Scaramucci is long CSCO; SkyBridge Capital Is A Fund Of Funds Manager; Anthony Scaramucci is one of 8 national finance chairs for Mitt Romney campaign; Scaramucci a fundraiser for Mitt Romney and has contributed to the Romney campaign; Najarian is long AAPL; Najarian is long BAC; Najarian is long GS; Najarian is long NFLX; Najarian is long INTC; Najarian is long CSCO; Najarian is long IBM; Najarian is long RVBD; Najarian is long ALL; Najarian is long DIS; Najarian is long FIO; Najarian is long LNKD;
For Steve Grasso
Stuart Frankel & Co and it’s partners own CSCO
Stuart Frankel & Co and it’s partners own HPQ
Stuart Frankel & Co and it’s partners own MU
Stuart Frankel & Co and it’s partners own P
Stuart Frankel & Co and it’s partners own ZNGA
Grasso is long NUAN
Grasso is long S
Grasso is long XLU
For Zach Karabell
Karabell is long TGT
Karabell is long AAPL
Karabell is long IBM
Rivertwice is short GS puts
Rivertwice is short XLF
For Patty Edwards
Trutina Financial is long AAPL
Trutina Financial is long GLD
Trutina Financial is long INTC
Trutina Financial is long JOYG
Trutina Financial is long MAT
For Tony Sacconaghi
Toni Sacconaghi maintains a long position in Seagate Technology (STX).
Mit Shah maintains a long position in Apple Inc. (AAPL).
Bernstein currently makes a market in the following companies AAPL / Apple Inc.
For Gene Munster
I or a household member have a financial interest in the securities of the following companies: none
I or a household member is an officer, director, or advisory board member of the following companies: none
I have received compensation within the past 12 months from the following companies : none
Piper Jaffray or its affiliates beneficially own 1% or more of any class of common equities of the following companies: none
The following companies have been investment banking clients of Piper Jaffray during the past 12 months: ACOM, DANG, DRIV, MOBI, YNDX, YOKU
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Other material conflicts of interest for Gene Munster or Piper Jaffray regarding companies in my universe for which I am aware include: ACOM, YNDX, YOKU: underwriting
Piper Jaffray received non-investment banking securities-related compensation from the following companies during the past 12 months: ACOM, DRIV
Piper Jaffray makes a market in the securities of the following companies, and will buy and sell the securities of these companies on a principal basis: AAPL, ACOM, AMZN, BIDU, DANG, DRIV, EBAY, GOOG, IACI, LOGM, MCHX, MELI, MOBI, PRTS, RLOC, SINA, SOHU, VCLK, WWWW, YHOO, YNDX, YOKU
Piper Jaffray usually provides bids and offers for the securities of the following companies and will, from time to time, buy and sell the securities of these companies on a principal basis: none
For Amelia Bourdeau
For Bryan Stockton
For Jeff Weiner
For Jeff Kilburg
Kilburg is long TLT