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JAT Capital Raises Its Stake in LinkedIn in 1Q15

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JAT Capital and LinkedIn

JAT Capital Management increased its position in LinkedIn (LNKD) in the first quarter of 2015. The hedge fund’s position in LNKD, worth $121 million, accounted for 3.26% of its total 1Q15 portfolio.

According to aggregated 13F data, about 82 hedge funds created new positions in LNKD in the first quarter of 2015. As well, there were about 18 hedge funds with LNKD in their top ten holdings. And, a total of 182 hedge funds added to positions in LNKD in this quarter.

In terms of dollar value invested, JAT Capital ranks 22nd among funds holding LNKD shares in 1Q15. Sand Capital, Jennison Associates, Vanguard Group, BlackRock, and State Street are other top holders.

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LinkedIn acquires Lynda.com

On May 14, 2015, LinkedIn completed the acquisition of an online learning company, Lynda.com, for approximately $1.5 billion. The deal was a combination of ~52% cash and ~48% stock.

LinkedIn stock drops following 1Q earnings release

LinkedIn reported a 35% increase in revenue for a total of $638 million in 1Q15. Net loss widened to $43 million from $13 million in 1Q14. While the company beat revenue and earnings estimates by $1.22 million and $0.01, respectively, it provided weaker guidance that caused its stock price to fall.

In 2Q15, the company expects revenue to range between $670 million and $675 million. EPS (earnings per share) should be $0.28. These figures are below consensus estimates of $717.5 million in revenue and $0.74 EPS.

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The major highlight of 1Q15 was the fact that over 50% of LinkedIn’s unique visitors accessed the site using mobile devices. As well, the company launched the new LinkedIn Lead accelerator suite, enabling marketers to reach their target audiences more effectively. This addition should allow the company to generate more advertising revenues.

Benchmarking the performance of LinkedIn

As you can see in the chart above, LinkedIn’s year-to-date returns are negative. Facebook (FB) and Twitter (TWTR) yielded returns of 3.08% and 3.43%, respectively.

Another technology stock that holds top position in JAT capital’s 1Q15 portfolio is Yahoo! (YHOO). Yahoo! has also yielded negative returns so far this year.

Even though LNKD has underperformed compared to its peers and ETFs such as SPY and IYY, Jet Capital’s bet on LNKD may yet be a wise one, given all the headwinds facing the technology sector at the moment.

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