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Is Linkedin's Soaring Share Valuation Overpriced?

   
11:59 am on May 18, 2011 (gmt 0)

WebmasterWorld Administrator engine is a WebmasterWorld Top Contributor of All Time 10+ Year Member Top Contributors Of The Month Best Post Of The Month



Is Linkedin's Soaring Share Valuation Overpriced? [bbc.co.uk]
LinkedIn is on track for the largest floatation of a technology company since the market bubble of 2000.

The site's projected value has jumped 30% ahead of its much-hyped initial public offering (IPO) on Thursday.

The big question is whether or not LinkedIn can justify the share price hike especially after the company revealed in the risk factors section of its prospectus that it does not expect to be profitable in 2011.

"Our philosophy is to continue to invest for future growth, and as a result we do not expect to be profitable on a GAAP basis in 2011," the filing said, referring to generally accepted accounting principles.



Earlier story
LinkedIn IPO Price Suggests a Value of $3 Billion [webmasterworld.com]
11:07 am on May 19, 2011 (gmt 0)

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this is a bubble site if I ever saw one!
12:02 pm on May 19, 2011 (gmt 0)

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LinkedIn is one of the true social media success stories. It is effectively cornering the market as a long term employment service. Where the other big ones like Monster and CareerBuilder are "1 time" usage outlets, LinkedIn gives people a reason to stick around inbetween hires and continue to 'do business'. If you have been in business very long at all, you quickly learn that business is a contacts game. Getting fresh contacts is difficult and the only ones that "stick" are those that you are referred too by friends. LinkedIn has become one of our greatest resources for contacts and new business connections.

Here is a great chart of revenue sources at LinkedIn:
[businessinsider.com...]
2:08 pm on May 19, 2011 (gmt 0)

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and in the first few minutes of trading - it Tops $90 a share. Double the offering price.
7:11 am on May 19, 2011 (gmt 0)

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System: The following message was spliced on to this thread from: http://www.webmasterworld.com/foo/4314681.htm [webmasterworld.com] by engine - 3:50 pm on May 19, 2011 (utc +1)


LinkedIn Goes Public

Investors keen to get in on the online networking craze snapped up LinkedIn Corp.'s IPO at $45 per share late Wednesday, hitting the top end of the projected price range. It minted LinkedIn with a market value of more than $4 billion, the highest for a U.S. Internet company taking its first bow on Wall Street since Google Inc. went public nearly seven years ago.


[finance.yahoo.com...]
10:09 pm on May 19, 2011 (gmt 0)

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...not bad for a company that was losing money every year and had only made $15/mill year profit before it debut... I guess this is another case of.. Bubble mania, the last guy with his pants down (seller) loses.
10:57 pm on May 19, 2011 (gmt 0)

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A lot of financial analysts are noting that the frenzy surrounding the LinkedIn IPO is just a glimpse of what will happen when other tech IPOs hit the market. More specifically, Facebook, Twitter, Groupon and Zynga.

Based on its own prospectus and my gut instinct, I'm not so sure LinkedIn can sustain this. The stock is overvalued, and almost every financial analyst I know thinks this bubble will eventually pop.
5:02 am on May 20, 2011 (gmt 0)

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Investors have fallen on their heads.
5:50 am on May 23, 2011 (gmt 0)

WebmasterWorld Administrator skibum is a WebmasterWorld Top Contributor of All Time 10+ Year Member



Break out the sock puppets!

LinkedIn is a real company with real revenues and real earnings but it is ridiculously overvalued at 8B or 10B or whatever it is now. At about an 8% float there just weren't that many people who were able to get shares. The next social IPOs should do a float of 5% or less and they'd really shoot to the moon. The insiders can sell fewer shares that way and still make a mint without giving up much of anything.