LinkedIn Shares Plunge As Revenue Shrinks

LinkedIn shares plunged this week, as much as 20 percent, after the company announced that the revenue forecast for the rest of the year will be a little lighter. Investors were not happy with the fact that LinkedIn is now not expecting 2015 to be that great after all. LinkedIn had said in February that revenue for 2015 should be between $2.93 billion and $2.95 billion, but now the company is saying around $2.9 billion tops.

money in bank

LinkedIn took the route that a lot of other companies have this year, blaming the downgrade in expected revenue on the strong dollar, citing that it is harming the business as a whole. LinkedIn also acquired, an educational website, so the company said upfront costs associated with that move also dropped revenue for the year. The company said that it’s paying $1.5 billion in cash and in stocks for the acquisition of, and there are costs in the short-term that need to be accounted for. is a subscription-based online website where you can get access to various courses in professional development.

Although investors might be upset with LinkedIn as far as revenue projections go, the company still ended up with $638 million in revenue for the first quarter. That is 35 percent more in revenue than in the same time period last year, so the company is actually doing better in 2015 than in 2014, although the 20 percent drop in shares would seem to indicate differently. Even with LinkedIn off the mark in terms of what expected 2015 revenue will be, it’s only a difference of less than $1 million, which isn’t that bad considering other businesses are hurting worse due to the strong dollar. Investors might jump back on the LinkedIn ship with the second-quarter reports, especially if the costs associated with the acquisition end up smaller than the company thought.