UPDATE: 4:30 p.m. EST -- LinkedIn's shares closed at $108.49 on Friday, down $83.79 per share for a single day drop of 44 percent, the largest in the company's history since it went public in 2011.
Shares in the social media company LinkedIn plummeted 40 percent Friday morning after the company hinted at slower future growth in a quarterly earnings report released Thursday. Though the company beat analysts’ expectations for revenue in the fourth quarter of 2015, it underwhelmed investors with projections for the coming term.
LinkedIn’s stock had fallen $77.14 or 40 percent by late morning at a time when the Dow Jones Industrial Average slouched just 1.2 percent. That hit immediately cut the company’s value by around $10 billion based on a market capitalization of $25.21 billion.
For the final quarter of 2015, analysts had expected LinkedIn to make 78 cents per share on $858 million in revenue, according to Thomson Reuters. The company’s latest report showed it beat projections by earning 94 cents per share on $862 million. However, the California-based company projected weak profits in the first quarter of 2016 that undercut analysts’ expectations, which prompted the selloff.
Last year, the social media network’s revenue growth was strong. LinkedIn brought in 35 percent more revenue than in 2014, tallying $2.9 billion in 2015. In the fourth quarter, revenue increased 34 percent over the same period in the prior year. The site finished the year with 414 million users.
But in the first quarter of the year, LinkedIn predicts it will bring in just $820 million in revenue which is a steep drop from the $858 million the company earned last quarter. Still for the year, LinkedIn expects to grow to at least $3.6 billion in total revenue.
“Our employees remain focused on realizing our mission and vision, and our culture remains our strongest asset,” CEO Jeff Weiner said in his prepared remarks. “Given current secular trends in the global economy, our sense of purpose has never been stronger or more relevant.”