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All of these firms sold shares to the public in the 2009-to-2015 range, but are now giving up on navigating the stock market as independent companies. In recent months, firms such as SolarWinds, Qlik, Marketo, Demandware, and Cvent have all struck take-private deals.

Quietly, there is a wave of IT, software, hardware, and social networking M&A brewing on Wall Street. Read FORBES' 2012 Cover Story: How LinkedIn Turned Your Resume Into A Cash Machine They are abandoning the stock market in favor of stable partners that see more long-term value in their business and growth prospects. And many of these companies are taking the same route as LinkedIn. There are numerous other fast growing tech companies who had their stocks destroyed this year after issuing soft earnings and guidance into a panicked market. In Fact, LinkedIn's 2016 round trip is not a unique phenomena. If Weiner and Hoffman decided they were tired of myopic stock market investors, who would blame them? It turns out the February plunge coincided with a deepening of M&A discussions between LinkedIn and Microsoft. Microsoft's takeover shows investors were wrong to dump LinkedIn en masse. Now, after a four month stay in the stock market doldrums, LinkedIn is back around $200. The tumble shaved a cool $1 billion from founder and chairman Hoffman's net worth. But the market reaction was swift and brutal.īy mid-February, LinkedIn, which opened 2016 at over $220 a share, was testing $100. To be sure, those figures represented a slowing from the 40%-plus sales growth rates LinkedIn enjoyed in previous years. It also offered guidance of about 25% sales growth in 2016. It turns out the problem for LinkedIn was that it reported *just* a 34% increase in fourth quarter sales as its online ad sales grew 20%, or roughly half its previous rate of growth. LinkedIn has tripled its revenues since 2012, and the strength of its business model is also reflected in its balance sheet, which carries $3.16 billion of cash and cash equivalents and just under $1.4 billion of convertible and long-term debt. The answer is none of the above.ĬEO Jeff Weiner has ably (and quietly) steered LinkedIn since its May 2011 initial public offering, and founder Reid Hoffman has remained as chairman of the company, providing stability and a consistent strategic focus.ĭuring its life on public markets LinkedIn has carved out a strong, cash generating niche in the crowded world of social networking by focusing on jobs and career networking, offering HR departments a bevy of new tools to screen for candidates. Accounting problems? Management turmoil? Balance sheet issues? New competitive threats?. What was it that spooked investors so much?.