LinkedIn shares plummet on Q3 loss, stock sale

Professional social networking site increases revenue, but operating costs skyrocket

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Shares of LinkedIn (NASDAQ: LNKD) fell as much as 11.6% in early Friday trading after the professional social networking site reported a third-quarter loss.

LinkedIn shares hit as low as 77.38 early Friday before bouncing back to 80.37 by early afternoon, still 8.2% below Thursday's closing price of 87.50.

Based on share price through early Friday afternoon, LinkedIn's stock is down about 35% from its all-time high of 122.70 set on the day of its ticker debut on May 19. (Keep that in mind, Groupon IPO suckers buyers.)

LinkedIn reported a third-quarter net loss of $1.6 million, compared to a net profit of $4.0 million in the year-ago quarter.

Revenue more than doubled to $139.5 million from $61.8 million in last year's Q3, surpassing consensus estimates calling for sales in the range of $127 million.

LinkedIn makes money through three sources: Its "Hiring Solutions," or paid jobs-listing service, which generated 51% of revenue in Q3; "Marketing Solutions," or site ads (29% of Q3 revenue); and "Premium Subscriptions" (20%).

Expenses also rose as LinkedIn continued to spend more on marketing, sales, research, acquisitions and global expansion. Operating costs soared 133% to $134.9 million from $57.8 million a year ago, with sales and marketing expenses more than tripling to $46.1 million, or 34% of total costs.

LinkedIn increased membership in Q3 to 131.2 million, up 63% from last year.

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