Stock package to be distributed among employees
The leading professional networking site, LinkedIn (LNKD) is finding it difficult to keep its stock price up since it announced its 4Q15 earnings. The company’s shares have seen a significant fall of 43% to a three-year-plus low of $102.90.
The reason could be the company’s guidance for 1Q16, which was far below analysts’ expectations. As a result, Jeff Weiner, LinkedIn’s CEO, has decided to forgo his annual stock package of $14 million, allowing the stock to be distributed to the employees.
During the recent quarter, Weiner mentioned that LinkedIn continues to deliver value to the company’s stakeholders by leveraging its three diverse product lines—Talent Solutions, Marketing Solution, and Premium Subscription.
In December 2015, LinkedIn (LNKD) revealed its redesigned flagship app, Project Voyager. According to the company, the growth rate for member-sharing content on its newly revamped Project Voyager app has nearly doubled to 40% YoY (year-over-year). The company’s Talent Solutions division generated revenue of $535 million in 4Q15, an increase of 45% YoY, which constitutes 62% of its total sales.
However, in 2016, LinkedIn expects this segment to grow by 25%–26% YoY. The company has blamed the economic slowdown in Europe (FEZ) and China (FXI) for the slower-than-expected growth in this division.
Among LinkedIn’s goals is the ability for its marketers to engage more professionals. Recently, the company introduced an additional feature to its Sponsored Updates that automates the process of ad targeting on the basis of marketers’ sales leads.
According to LinkedIn, its year-over-year revenue generated from sponsored updates was more than double in 2015, which constitutes 52% of revenue generated from Marketing Solutions. Facebook (FB) and Twitter (TWTR) generate the majority of their revenues from digital ads. However, LinkedIn generates over 60% of its revenues from fees paid by employers and recruiters. The remaining 40% is generated through advertising and premium subscriptions.