New Trade: Long LinkedIn ($LNKD) & Short Pandora ($P)

By: ispeculatornew
Date posted: 07.16.2012 (5:00 am) | Write a Comment  (2 Comments)

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It will be a very busy morning as I will be closing off 2 trades following a week that was positive overall. I am closing one winning and two losing trades.

Long TripAdvisor (TRIP) & Short Blue Nile (NILE) +20,04%

Long Travelzoo (TZOO) & Short Yahoo (YHOO)  -28,51%

Long LinkedIn (LNKD) & Short Zillow (Z) -27,72%

After a fairly good week, I am back with a new pick today which I hope will bring the long & short stock picks much closer to the success that I’ve had with power rankings and the yearly stock picks competition. Today I am back with a trade that involves two very high P/E ratios that carry a decent amount of speculation. I simply believe much more in one than the other and think that this trade, in the medium to long term is a clear winner. Hopefully that translates into this trade.

Let’s start off by looking at the number for LinkedIn and Pandora:

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Long LinkedIn (LNKD)

LinkedIn will be reporting earnings at the start of August and I fully expect to see more signs of growth as the company continues to gain market share, to expand into a bigger animal and while it does not aspire to be a second Facebook, it is quickly becoming the other social network that ever professional “needs” to be on. That is translating into great advertising and product opportunities. I just think that LinkedIn is one of the few companies that can justify its high P/E ratio.

Short Pandora (P)

Pandora has been doing fairly well by most people standards in recent weeks as it continued to increase its business by now offering its service in Australia and New Zealand helping some starting to call it a quest for world domination. There is no doubt that Pandora has a compelling product but I just think that the competition level is so high that decent profitability will be difficult to reach, no matter how many users Pandora is eventually able to get.

Disclosure: No positions on LinkedIn (LNKD) or Pandora (P), this trade will be opened on Monday morning

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  1. Comment by Ken — July 16, 2012 @ 6:16 am

    Aren’t you already Long LNKD, Short Z?

  2. Comment by IntelligentSpeculator — July 16, 2012 @ 6:21 am

    @Ken – That trade is being close this morning as well (just adjusted the article), I’ll try to update the positions on the sidebar today.. sorry for that. Thanks for pointing that out.

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