There is a lack of credible research on “just how low can LNKD go?” Our answer has not changed much since we put LinkedIn in the Danger Zone back in August 2013. We think the bottom for this stock is closer to $20/share
A disconnect between investment theory and investment practice exists and is manifested in the way investors should value stocks versus the way they actually do value stocks.
There is one last adjustment we must make involving discontinued operations: adding net assets from discontinued operations to shareholder value. Because discontinued operations are parts of a company being held for sale, the value of the net assets from these discontinued operations approximate the cash the company will receive from the sale. This cash will then be available for distribution to shareholders.
The net amount of deferred compensation is included in shareholder value. If a company has a net liability, future cash flows will be diverted to pay for that obligation. If a company has a net asset, then any future increases in the obligation will not need to be met with new contributions from the company. Instead, the company can return that cash to shareholders.