LNKD' s certainly has been a momentum stock. I like the business model and competitive barriers. The question is entry price. LNKD violated the low of the gap up yesterday, I was stopped out of any add on shares, I am pyramiding the position – strike one. The stock has gone on to make new highs, liquidity and triple digit earnings growth is an attractive combo. I believe that the market is dancing on a ledge at this point and will ultimately drag down even the best names including LNKD. I have been involved in many of the leaders; these may or may not lead the next run, I keep a watchlist of fresh ideas as they set up and signal valid buy signals under a supportive market environment – The market is not supportive of new buys at this time for the glamour names. Too many BAD large cap charts, if they break its unlikely even the best merchandise will hold up. The market is likely to begin a 8-10% correction between Sept 10 and 20, based on a supportive Congressional Syria military strike vote next week and the beginning of the taper by the Federal Reserve the following week.
In summary, I will be looking to buy between $ 213.33 and $ 222.22. The former discounts the $ 222.22 August low by the 4% dilution of the secondary.
I agree with much of your analysis. LNKD is a story stock with a strong story, but is pricey @ $ 240 given the near term negative macro uncertainties including Syria, Tapering, Debt Extension. Insider's are also cautious. The Chairman/Founder, CEO, CFO, and others have recently sold 2.7 million shares. The options market is is telegraphing caution, September 21 Puts open interest is highest in the $ 205-$ 230 range. A $ 213 - $ 222 entry opportunity is likely this month. The risk adjusted return of a high $ 230 to low $ 240 secondary is unfavorable.
Stock weakening in after hours to the $233's. Next base of support $222 could be tested as early as Thursday, but a high probability within the next two weeks.
For the long term holders the difference between $ 213- $222 and the high $230's may not be meaningful, but for many like myself seeking to maximize short to mid term returns entry and exit points are critical. Personally, I liquidated my holdings in LNKD, and will re-enter in stages when the stock declines to and below the target range, or demonstrates decisively that it it headed higher despite the secondary and challenging macro environment.
There is a confluence of near term negative factors. A large dilutive secondary combined with recent higher than normal selling by the three most senior officers at prices ranging from $ 223-$242 can be telling. Particularly troubling is selling by CFO's, who are keenly attentive to stock valuation. Lastly, as previous suggested, the September macro environment has potent and identifiable headwinds. Tomorrow's secondary could be at or near the stock's high water mark for September.