Linkedin surges amid optimism of adding users

LinkedIn Corp., the biggest online professional-networking service, surged to a record high after Ken Sena, an analyst at Evercore Partners Inc., raised his price target amid optimism that the company can add users. Sena raised his price estimate to $200 from $160 and said in a research report Wednesday that LinkedIn could reach $280 within five years. The company is “surfing the software stratosphere,” Sena wrote. The shares rose 6.83 per cent Wednesday in New York, closing at $168.55. “LinkedIn has a large consumer-facing audience component; its businesses are increasingly akin to software enterprise providers,” Sena wrote. The company’s growth prospects more closely mirror a software provider like Salesforce.com Inc. than an Internet startup, he said. Salesforce closed at $163.36 Tuesday, and sold shares at $11 apiece in its 2004 IPO. LinkedIn’s shares have more than tripled since its public market debut, outperforming other consumer Web companies that have recently sold shares. Through Tuesday, Facebook Inc. had dropped 28 per cent since its IPO in May 2012, while Groupon Inc. and Zynga Inc. had lost more than 60 per cent of their value since first selling shares in late 2011. LinkedIn differs from each of those companies in that most of its revenue comes from subscriptions, rather than ads or one- time transactions. Its stock performance more closely resembles business-software companies Workday Inc. and ServiceNow Inc., which have surged since their IPOs last year.