LinkedIn announces $175-million IPO
In one of the most anticipated stock market debuts of the year, LinkedIn Corp. plans to raise as much as $175 million in an initial public offering.
The Mountain View, Calif., company, which runs the largest networking site for professionals, became the first major social networking site to file a prospectus with the Securities and Exchange Commission on Thursday. It is widely believed that LinkedIn could raise about $200 million in the offering.
The move could signal an end to the long dry spell for major Internet IPOs. Web content company Demand Media jumped 33% on Wednesday in its first day of trading. Online coupon service Groupon Inc. is in talks about a possible public offering. Facebook Inc. will probably wait until 2012 for an IPO.
“Having a social media company as significant as LinkedIn being public will bring more investment money into the sector,” Wedbush Securities social media analyst Lou Kerner said.
He added: “We are going to see an increasing number of these companies go public in 2011 and then we will really start to see the sector hit its stride in 2012.”
Barring any roadblocks, the 7-year-old LinkedIn — with 1,000 employees and 90 million users — could go public in the next several months. Investors have been clamoring for shares of the privately held company, which has an implied value of $2.5 billion on private trading exchange SharesPost.
LinkedIn does not have the global girth of Facebook, which has more than 600 million users. But LinkedIn has carved out a profitable niche in helping people hunt for jobs, recruit new employees or find industry experts.
Setting up a profile is free on the website, but LinkedIn makes money from paid subscriptions and advertising. It had revenue of $161.4 million in the first nine months of 2010, almost double from the same period a year earlier, according to the prospectus. It had $1.85 million in profit in the first nine months of 2010. Facebook had $1.2 billion in revenue in the first nine months of 2010 and $355 million in profit, Goldman Sachs told prospective investors earlier this month.
LinkedIn did not disclose the number of shares to be offered or the price range, both of which will be set closer to the actual stock sale. LinkedIn was created in 2003 by former PayPal executive and Internet investor Reid Hoffman. It has raised more than $100 million.
