Quick Win by the Algorithm: LinkedIn Corp (LNKD)

Quick Win by the Algorithm

LinkedIn Corp

On May 17th, 2016, the I Know First algorithm gave a bullish signal of 14.42 for the ticker LNKD with a predictability indicator of 0.26. In accordance with the algorithm’s prediction, LNKD jumped 40.30% in the following month.

LinkedIn (LNKD) is the world’s largest professional network on the Internet with more than 400 million members in over 200 countries and territories. Through their proprietary platform, members are able to create, manage and share their professional identity online, build and engage with their professional network, access shared knowledge and insights, and find business opportunities, enabling them to be more productive and successful.

On June 13th Microsoft (MSFT) announced that it will acquire LNKD for  $196 per share (approximately $26.2 billion), a 46.5% premium over June 10th’s closing price of $131. LNKD’s shares had suffered in the last year as they fell 43% on February 5th following a lower than expected earnings report. Microsoft believes that by integrating its cloud services with LNKD’s professional network it can expand LinkedIn users’ experience.

In addition to generally putting its infrastructure at LinkedIn’s disposal, MSFT plans to develop products which use LNKD’s extensive data to enable members to advance professionally, be it by facilitating sales through the network, suggesting and facilitating possible professional relationships, and providing relevant newsfeeds and on-demand courses. The tech giant also plans to help organizations recognize team capabilities  and increase their productivity by using its cloud infrastructure to  analyze employees’ information and skills as uploaded on the professional network.

On May 17th, 2016, one of I Know First’s senior analysts wrote a bullish article about LNKD. In the article, he argues that the new effort to create a rival service to Facebook’s Instant Articles is highly commendable. He believes it is the right path toward improving the ad-related revenue stream. Since the article was published, LNKD has increased 48.5%.

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