LinkedIn Corp (NYSE: LNKD) capped off a horrendous week with a 43.6 percent decline on Friday after a major earnings miss spooked the market. Unfortunately, CNBC analyst Jim Cramer believes that the stock’s freefall may not be over yet.
“You have a stock in free-fall where sellers will take it as low as they want because they don’t have any way to value it anymore,” Cramer explained.
LinkedIn’s Q1 2016 earnings guidance of $0.55/share on revenue of $820 million came in well short of consensus expectations of $0.74 EPS on $866 million in revenue.
Cramer said that the market selling pressure on high-growth stocks may not yet be at an end.
“Many individual stocks were annihilated beyond all reason, just laid to waste, and maybe they still haven’t found a bottom.”
Perhaps LinkedIn shareholders can take some comfort in the fact that, on a day where the NASDAQ fell 3.2 percent, at least LinkedIn wasn’t the only big-name double-digit loser on the day. Tableau Software Inc (NYSE: DATA) declined an astounding 49.4 percent and salesforce.com, inc. (NYSE: CRM) fell 12.9 percent.
Cramer believes the United States is currently in the middle of a “rolling bear” market, and that high-growth tech names are being de-valued in favor of solid high-dividend stocks like Verizon Communications Inc. (NYSE: VZ).
Disclosure: The author holds no position in the stocks mentioned.
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