Could LinkedIn Look to Pick up Monster on the Cheap?

by Trefis Team
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Despite the U.S. unemployment index actually slipping by 0.4% in November, Monster’s (NYSE:MWW) stock has stayed at August 2011 levels of around $7.50-$8.00, representing roughly a $1 billion market cap. This erosion of roughly $2 billion in market cap over 2011 is brewing interest in the company’s potential buyout again, considering that the stock is cheap as of now. [1] One of the potential contenders could be arch rivals LinkedIn (NYSE:LNKD), who could be seeing some synergies with Monster.

See our complete analysis for Monster

Core Businesses of Monster and LinkedIn are Aligned

While LinkedIn has done well with its social networking element within the recruitment market, the core business of linking employers and employees remains the same for the 2 companies. Monster has clocked in over $790 million in revenue for the period Jan-Sep 2011, [2] and LinkedIn can benefit from the added scale of users and employer databases. Additionally, the Monster Career Ad Network manages a sizable 69 million monthly unique visitors. [3] LinkedIn’s ads & marketing division could see upside from the additional traffic.

On the flip side, large mergers and takeovers have traditionally been tough to execute as planned and LinkedIn may want to achieve this growth organically.

Despite their core business being similar, LinkedIn would face a further challenge in incorporating Monster’s database into its own social networking interface. The heavy discount on Monster’s stock could however act as a motivation for LinkedIn or someone else to make a bid.

We currently maintain a near $13 price estimate for Monster stock, which is roughly 61% above the current market price.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. Bloomberg: Job Slump Depresses Value []
  2. Monster Worldwide Reports Third Quarter 2011 Results []
  3. comScore Media Metrix Ranks Top 50 U.S. Web Properties for November 2011 []
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