
LinkedIn Prices IPO At $32 To $35 Per Share - acrum
http://techcrunch.com/2011/05/09/linkedin-prices-ipo-at-32-to-35-per-share-expects-146-6m-in-net-proceeds-from-offering/
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wildmXranat
Of all the Social* out there, LinkedIn seemed the most purpose driven. The
real issue with it is that there is no benefit in being a member of it. It
matters to firms and recruiters and if that wasn't shitty enough, LinkedIn
will rank higher in search engine results for your name that something you
might have published yourself. In return, I give employees bonus points for
getting to the top of search results on their own, using their own skills and
not a fill-in the blanks template profile site.

That correlates to my main question of: why is LinkedIn valuable to the tune
of $35 / share? Is it because they just started to rake in some profits for
the first time from their job listing service ? Is it the secondmarket hype ?
Is it because Sequoia capital has it in their best interest ? Maybe it's just
because they re-branded their service as hiring solutions, added value to
advertisers and rode the wave that Facebook created.

Do away with it and invest time in making an employee/career profile for
yourself. It's a joke how LinkedIn is more of the same that didn't work for
employees in the past.

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ThomPete
As far as I am aware LinkedIn have been profitable for a while even before the
news features.

They have 100 Million users

Loads of data

It's invaluable for employers like myself.

I have several times been contacted with regards to jobs by recruiters and I
can see they went to my account.

It's a great verification tool

Their API's are pretty cool.

To me LinkedIn is the one social network that shuts up and just let me build
relationships without asking me to participate every day.

So I think your characterization is unfair and wrong.

LinkedIn is going to be around for a long time.

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lwhi
They have 100 million users because it's impossible to close an account.

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blankenship
It's not impossible at all; I closed my account last year.

<https://help.linkedin.com/app/answers/detail/a_id/63>

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lwhi
I found it impossible to do so some years ago, and my account has been left
dormant ever since as a result. I'm sure I'm not the only person who faced
this problem.

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ThomPete
Why would you want to close your account? That's like throwing out your
rolodex.

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puredemo
Do you work for LinkedIn?

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ThomPete
That's a great question. The answer is no, but had you used LinkedIn that
would have been easy to figure out.

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whyleyc
There's an interesting analysis of which web company is worth the most per
user at <http://neptune.observer.com/node/138871> \- LinkedIn ranks 3rd on
their list of 9 arbitrary companies:

    
    
      Groupon - $210
    
      Facebook - $105
    
      LinkedIn - $33.33
    
      Zynga - $25.58
    
      Twitter - $18.05
    
      Foursquare - $20
    
      Tumblr - $15
    
      Skype - $1.56

~~~
eli
I know very little about the stock market, but isn't the individual share
price totally meaningless on its own?

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pstack
That isn't the point they're making here, though. They're comparing the
valuation with the size of the user base. For example, at $3b for LinkedIn,
divided by the number of users they have, it comes to about $33.33 per user.
In other words, a sort of very rough market valuation of what the industry
thinks the users are worth, I suppose.

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eli
Got it, thanks.

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orijing
Of the 7,840,000 shares being offered, 3,012,196 are from existing holders,
and the balance (4,827,804) are issued. Therefore, post-IPO, LinkedIn will
have 94,498,627 + 4,827,804 = 99,326,431 shares outstanding.

At a median price of $33 per share, that gives LinkedIn an implied valuation
of _$3,277,772,223_ , which isn't as high as I'd expected, given Facebook,
Zynga, Groupon and Twitter's recent valuations

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c2
Thanks for doing the math. Unless you are currently a shareholder or options
holder, market cap is a much more meaningful number then price per share. I'm
surprised tech crunch didn't mention it at all.

Three billion might seem low compared to Facebook, but it is actually higher
then I expected. I will be a patient outside observer for this IPO to see how
Wall Street treats and values social network stocks.

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Maro
LinkedIn is worth 94,498,627 * $32 = $3B and the co-founder still owns 21%.

It had Q1 revenue $94M, Q1 net income $2M.

~~~
aquark
So the P/E ratio is currently about 398 (optimistically) assuming they earned
$2M for each of the last 4 quarters.

Guess that isn't a useful metric for valuing 'social' companies! Anyone know
what Google or Amazon's P/E ratio was when they went public?

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iamjustlooking
Not sure of the exact number but you can see it on the charts here:

<http://ycharts.com/companies/AMZN/pe_ratio>

<http://ycharts.com/companies/GOOG/pe_ratio>

Edit:

Worked it out, GOOG was 154.29 and AMZN was 657.75

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JoachimSchipper
> The company expects [to get] approximately $146.6 million (in total the
> company will be raising $274 million but some of this money goes to fees
> etc.).

Is this normal? They paid almost a third of the money they have raised.

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justincormack
I was a bit perplexed by this, but reckoned it was just bad journalism, and
its not all fees, but that some of the existing shareholders are selling some
of their shares in the IPO, so Linkedin does not receive that money. A guess,
but seems most likely.

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dstein
If the valuation starts off so high that means future growth has already been
priced in, which means there's no compelling reason for any new investor to
buy the shares. The share price will drift downward for years (which happens
to most IPO's) unless they can completely blow the doors off with new revenue.

~~~
orijing
_The share price will drift downward for years (which happens to most IPO's)_

Do you have data to support that? IPOs are highly volatile, but would surprise
me if most IPOs drift downward for years.

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dstein
It's just my anecdotal experience. It's pretty easy to prove the IPO market
lately hasn't been like it was in the 90's and that's the reason the big tech
companies have been staying private.

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tocomment
When is this ipo?

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tocomment
I don't get you guys. I think this is a very reasonable question.

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cheez
Too high. They should learn from Bill Gates.

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cheez
Why downvoted? Bill Gates insisted on having a lower IPO...

