CNBC's Jim Cramer: "Overpriced" LinkedIn IPO will "destroy everybody" (video)

May 19, 2011 1:36 PM
Anthony Ha

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July 9-10, 2013
San Francisco, CA

Financial pundit Jim Cramer, host of the CNBC TV show Mad Money, went ballistic today when discussing LinkedIn’s initial public offering, saying that it marked the beginning of a new dot-com bubble that will end as badly as the one 10 years ago.

“This is the most outrageously overvalued, ridiculous thing that I’ve seen since CBS Marketwatch or TheGlobe,” he said.

Cramer also compared the IPO to TheStreet.com, the site that he cofounded. Like LinkedIn, Cramer said, TheStreet was a “sliver” IPO, where only a small number of shares became available on the public market, driving investors into a frenzy. But, the interviewer asked, if LinkedIn’s stock price eventually comes back down to Earth, won’t that lead to more reasonable pricing of other Web companies expected to go public, like Facebook, Twitter, and Groupon? Cramer responded that LinkedIn will probably remain overvalued as long as there’s only a limited amount of stock available.

“We’re going to do another one of these things where we destroy everybody,” Cramer said. He later added, “This is exactly the playbook from 1999.”

So is Cramer right to be worried? Well, I was still in high school during the first dot-com era, but VentureBeat’s Matt Marshall tells me that this doesn’t begin to compare to the hype last time around. Matt also sounds more optimistic about LinkedIn’s long-term potential, as you can see in his post about the IPO.

http://plus.cnbc.com/rssvideosearch/action/player/id/3000022964/code/cnbcplayershare
[via Business Insider]

http://pulse.yahoo.com/_KO3AYKM7RRDGPMBZKCBGYS4LTU Sri

Kramer doesnt get it then. 1999 was a bubble because the world did not transition to embrace the internet as quickly as people expected. Hence, all those business projections for e-commerce were simply out of the door. However, 10 years later, we have the opposite. Everyone is online PLUS mobile is huge and everyone is comfortable doing online transactions. Now all we need are the online services. Linkedin will be huge and it introduces its on economy and sub industry on top of the Linkenin platform. Think Ebay and Amazon. Same with Facebook and Twitter. So, there you go Kramer you old dog.
http://twitter.com/whyisthere Steve W

If you want balanced reporting that actually goes in depth and is not a bunch of sales people yelling at a tv camera read and watch Bloomberg. I could care less what this blowhard has to say.
BlueBlade

So you think the company is worth $10 billion? I think you are pretty ignorant to try to compare the revenue of Linkedin to Ebay or Amazon. You should look at the numbers between Linkedin and Netflix and try to make that claim again.
sarahx

Huh? People were on the Internet in mass quantities in 2000. What were you, five?The reason all of those companies failed is because they failed to translate all those “eyeballs” into “revenue.” Only Google figured it out.LinkedIn does okay, but not well enough to be reflective of today's price. This was pure speculation, but given how little new development I've seen out of LinkedIn in the past three years and how little I use the service, I don't see LinkedIn being a sustainable success. Caveat – LinkedIn will probably experience some natural organic growth in the next year as the bubble fuels extensive hiring in Silicon Valley and beyond. My company just paid $5k to take control of our company jobs page. This is temporary. When the industry evens out again (or worse), the impact on LinkedIn will be severe.I wouldn't hold this stock past January. The tech hype cycle will continue at it's peak through CES. Then some of the early IPO earnings reports will start to hit, and things won't be as good as investors will hope. They'll still be optimistic so the bubble won't burst yet, but the shininess will wear off. Things will plod along, until later in the year when people start to realize that advertising is a really really tough and flaky business. Then the slow spiral for the empty Web shells will start to accelerate. This hype/bubble/burst cycle won't take as long this time around. The burn is too fresh in many people's minds. Everyone is jumping in head first like mad so as to not miss the upside right now. But unlike last time, people are going to jump ship en masse at the *first* hint of trouble. Last time, things were slowly declining, and everyone had hope it was just a minor correction that would even out. It didn't. This time, when sentiment starts to turn, it'll be a rush to escape.
http://pulse.yahoo.com/_6ZTJASVUR7BGJRIUFQKZZPTDDM Tex Ten

Thanks Linked in! for ruining the momentum. everything was going swell till you decided to float…now everyone knows its a bubble! Damn!
http://profiles.google.com/robbiebenoit Robert Benoit

I already shorted it.. just waiting til the pop
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