As LinkedIn IPO soars, so do questions about pricing
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Pop. That’s the sound of LinkedIn’s shares exploding on the New York Stock Exchange in their first morning of trading.
The scorching hot stock is now up more than 140% to $109 but has soared as high as $122.70, delivering the kind of first-day rush that dot-coms made infamous during the first Internet boom. And LinkedIn’s underwriters, Morgan Stanley, JP Morgan Chase and Bank of America, are, well, laughing all the way to the bank.
[Updated, 10:20 a.m.] To check on LinkedIn price at any moment today, click here.
As Business Insider’s Henry Blodget, a major player as a stock analyst in the 1990s stock bubble, rather bluntly pointed out: LinkedIn executives should be questioning if the bankers ‘wildly’ underpriced the deal and sold LinkedIn’s stock to institutional clients ‘way too cheaply.’
In other words, because the bankers had priced the stock at $45 instead of $60 a share, LinkedIn may have left about $130 million on the table, and its shareholders who are also selling left about $50 million.
The logic goes: Everyone knew the shares would take off after the opening bell. But a 130% rise, Blodget said, would suggest that either the bankers were clueless about how much investors were willing to pay to get a piece of LinkedIn, or they just gave their institutional investors an early Christmas present wrapped in a greenbacks bow.
Did LinkedIn get swindled? LinkedIn CEO Jeff Weiner isn’t buying it. He told Bloomberg TV this morning that he was ‘very comfortable’ with the IPO price.
Now it’s up to LinkedIn to live up to its stock price.
‘To justify the current price, LinkedIn will need to execute flawlessly,’ said Michael Yoshikami, chief investment strategist at YCMNet Advisors in Walnut Creek, Calif.
-- Jessica Guynn