Money Matters - Simplified

LinkedIn debuts spectacularly on NYSE, IPO doubles

LinkedIn’s first day performance at the New York Stock Exchange bodes well for all internet stocks in general and for Facebook and Twitter in particular.

LinkedIn (LNKD), the largest professional-networking website, joined the elite list of companies whose initial public offering (IPO) more than doubled on the first day of trading.

The stock of the website more than doubled to close at $94.25. The immensely powerful launch underscores the reawakening of public interest in the internet, a trend that went missing after the dot-com bubble burst.

Forerunner for other tech stocks
The stock, issued at $45, went as high as $122.70 during the day before finally closing at a 109 percent gain on a trading volume of 30 million shares.

"LinkedIn is the first one (social-networking company) out. LinkedIn has validated there's quite a bit of interest,” opined Matt Therian of Renaissance.

"There's tremendous investor appetite for shares of social media companies, particularly the premier ones like LinkedIn," said Lou Kerner, managing director of the private shares group at Wedbush Securities Inc.

The Mountain View, California based business-oriented site intends to use the proceeds from the IPO to expand business by buying out other companies and technologies.

"I wouldn't have been surprised to see it open in the $60 to $65 range, but it's obviously opened up significantly higher than that," averred Kerner.

LinkedIn’s first day performance at the New York Stock Exchange bodes well for all internet stocks in general and for Facebook and Twitter in particular.

The initial public offering of LinkedIn was underwritten by Morgan Stanley, Bank of America, Merrill Lynch, J.P. Morgan, Allen & Company and UBS Investment Bank.

About LinkedIn
LinkedIn generated $93.9 million in revenue during the first-quarter of the year. While 70 percent of revenue came from business subscriptions, advertisements accounted for the rest of the 30 percent.

The site’s net income also rose 14 percent to $2.08 million in the said quarter.

The Mountain View, California based business-oriented site intends to use the proceeds from the IPO to expand business by buying out other companies and technologies.

Launched in May 2003, LinkedIn has about 100 million plus members as of March 2011. It competes with the likes of Monster in recruitment services market; Facebook and Twitter in social networking; and Google and Yahoo in the domain of online advertising market.