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The LinkedIn Bubble

LinkedIn (LNKD) is a great, well-run company but its valuation is, as Jon Gruden might say, redonkulous.

LinkedIn rose more than $32, to over $270/share, as of early Friday afternoon, after yet another great earnings report. It "beat the street" with net income of $3 million on revenue of $643 million.

For the full year LinkedIn reported a loss $16 million, on revenue of $2.219 billion. The revenue growth numbers continue to be the focus, up 45% from last year's $1.529 billion. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, or EBITDA, was $592 million, or 27% of revenue.

But even given that stellar growth, you're talking about paying 14 times revenues for shares in this company, with no earnings to speak of. So why all the buy ratings?

Just as Google (GOOG) (GOOGL) is really just an advertising company, LinkedIn is a jobs board. Its money comes from… Read More …