LinkedIn Hits A Homerun With Its IPO

by Lori Taylor · 0 comments

social media marketingLinkedIn stock soared on opening day reaching as high as $105 a share by afternoon trading. That puts it on par for the biggest opening day of 2011, though it’s still early in the year. Some people have said LinkedIn’s initial price of $45 a share was too high to begin with and that the surge to $105 was a sure sign of a social media “bubble” much like the “tech bubble and “housing bubble” were before it. It seems a little premature to say the LinkedIn price surge is a bubble waiting to burst. LinkedIn has a very specific niche market that uses to leverage a wealth of programs and offerings. By focusing on one specific sector of the online community they stand a pretty good chance of maintaining market share and continuing to grow in the years ahead.

The stock traded at nearly $105 in early afternoon trading under the symbol “LNKD” on the New York Stock Exchange. That puts the company on track for one of the biggest first-day gains of 2011.

Only Chinese online security company Qihoo 360 Technology Co. has closed higher, ending up 134.5 percent when it debuted on March 30. At $103, LinkedIn’s gain is 129 percent.

The last time a U.S. company more than doubled in an IPO debut was Nymex Holdings Inc. in November 2006, according to Dealogic. Nymex, which operated the New York Mercantile Exchange, was acquired by CME Group Inc. in 2008

LinkedIn Corp.’s initial public offering Wednesday night was priced at $45 per share, at the high end of the company’s initial target. The company raised $353 million in an IPO that valued it at $4.3 billion. That’s the largest valuation for a U.S. Internet company since Google went public in 2004.

The demand reflects investors’ belief that Internet services that connect people with common interests will be able to make more money as the Web’s audience steadily expands. LinkedIn’s valuation eventually may look modest compared to other Internet companies that are being touted as potentially going public in the next 18 months. The short list includes: online messaging service Twitter, Web game maker Zynga, coupon site Groupon and Facebook, the social network that boasts more than 500 million users.

IPO analyst Scott Sweet, the founder of IPO Boutique, said Thursday’s market debut was a good sign for those other social-networking companies.

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Lori Taylor


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