Why social media stocks are getting murdered this week


Social media may be what all the kids are up to, but it wasn’t what investors liked this week.

Three social media companies — Twitter, Yelp, and Linkedin — all reported underwhelming results that led to their stocks being clobbered this week, reports the New York Times.

Linkedin shares [fortune-stock symbol= »LNKD »] fell 25%, Twitter [fortune-stock symbol= »TWTR »] 25% and Yelp [fortune-stock symbol= »YELP »] 23%.

From the Times:

The performances illustrate the way investors are questioning whether social media companies can keep their growth rates vigorous enough to justify their valuations. The stocks of all three companies had traded at relatively high levels, reflecting Wall Street’s giddy projections. Yet all three shattered that perception in their own way. And while many of these stocks are often volatile, with investors on edge about the weak economy, interest rates and other issues, shareholders increasingly have little tolerance for the slightest misstep.

“Based on…

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