Will LinkedIn Surge Higher After Recent News?

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With shares of LinkedIn (NASDAQ:LNKD) trading around $209, is LNKD an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

LinkedIn is an online professional network with more than 90 million members in over 200 countries and territories. Through the company’s platform, members are able to create, manage, and share their professional identity online as well as build and engage with their professional network, access shared knowledge and insights, and find business opportunities. Its platform also provides members with applications and tools to search, connect, and communicate with business contacts, learn about career opportunities, join industry groups, research organizations, and share information. Networking and social contact is rising in importance for consumers and companies all around the world.

LinkedIn is introducing a Chinese-language website that will restrict some content to adhere to state censorship rules, expanding in a country where U.S. technology companies have clashed with the government. The Mountain View, California-based professional social-networking company is offering a new version to provide a more localized service after more than a decade of having an English-language site there, Derek Shen, LinkedIn’s China president, said in a blog post yesterday. LinkedIn is also creating a joint venture with Sequoia China and China Broadband Capital to connect more than 140 million Chinese professionals, he wrote. LinkedIn said it has more than four million members in China, which is one of the company’s fastest-growing user bases. The new website puts LinkedIn deeper into a country where social-media peers such as Twitter Inc. (NYSE:TWTR) and Facebook Inc. (NASDAQ:FB) are blocked after they balked at government censorship rules. Facebook hasn’t built up operations in China beyond hiring contractors to help advertisers reach people outside of the country, spokesperson Debbie Frost has said. Google (NASDAQ:GOOG) ran afoul of Chinese authorities in 2010 for refusing to abide by local censorship requirements, leading to the company shutting its unfiltered search tools there and redirecting users to pages in Hong Kong.

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