LinkedIn v. Facebook: Tale of Two IPOs

May 14, 2013 8:07am

Morning Business Memo…

LinkedIn (LNKD) and Facebook (FB) will celebrate the anniversaries of their IPOs just a few days apart this week. But their experiences as publicly traded companies couldn’t be more different. LinkedIn promotes its service as a stepping-stone to a more enriching career. LinkedIn’s stock has nearly quadrupled in value from its $45 IPO price on May 20 two years ago. On Monday, it closed at $175.03 per share. In contrast, Facebook’s stock is hovering around $27 per share, down 29 percent since its debut May 18, 2012 at $38. LinkedIn is emerging as the standout performer among Internet companies that connect people with common interests. The firm is growing faster and yielding far better shareholder returns than the rest of a class that includes online deals maker Groupon, Web game maker Zynga and business review site Yelp as well social networking leader Facebook. With the exception of Yelp, the stocks of all those other companies are stuck well below their initial public offering prices.

A big shakeup could be ahead at Sony (SNE). Activist hedge fund manager Dan Loeb–known for starting big corporate fights–is calling for a breakup. In a letter delivered to Sony’s chief executive, Loeb wants the company to spin off the profitable movie and entertainment division from its struggling consumer electronics business. The demand from Loeb, whose Third Point hedge fund now owns more than 6 percent of Sony stock, could set off “a battle that could roil Japan’s famously staid corporate culture,” says Andrew Ross Sorkin of The New York Times. Aggressive deflation-fighting efforts by Prime Minister Abe and the Bank of Japan have sparked greater Wall Street interest in Japanese companies. Loeb is a powerful investor, who played a key role in the ouster of Yahoo’s former CEO and the appointment of Marissa Mayer to run the internet firm. Sony says its entertainment division is not for sale.

Some of the world’s largest retailers have signed on to a new agreement to improve worker safety in one of the world’s poorest nations – Bangladesh. Over 1,000 workers died last month when a clothing factory collapsed, despite earlier warnings that the complex was unsafe. European retailers H&M, Tesco, and the owners of Zara plan to sign a legally binding agreement. But Wal-Mart (WMT), The Gap (GPS) and most other US firms have not agreed to join them.

 

America has a retirement savings crisis. Half of all Americans have less than $10,000 in savings. The number of elderly people living in poverty is expected to rise. Saving for retirement is not mandatory, but a growing number of retirement and savings experts say it should be. At most employers you don’t have to sign up for a deduction and many people decide not to. “It’s a natural thing to have your initial thoughts about retirement is that it’s so far into the future that I can worry about it later, I don’t have to save for now,”  says certified financial planner Howard Hook at EKS Associates in Princeton, N.J.   But that’s a mistake, he says. “Instant gratification versus delayed gratification.”

A new ad campaign will take aim at texting while driving in a big way. All four of the nation’s biggest cellphone companies are uniting behind AT&T’s “It Can Wait” slogan. Expect TV and radio to be blanketed this summer. The campaign is unusual because it represents companies warning against the dangers of their own products.

Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc

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