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Shares in LinkedIn soar on stock market debut | |
(about 1 hour later) | |
Shares in business networking website LinkedIn have soared on their debut to open at $83 in New York, having been priced at $45 each. | |
That price was already at the top of an increased range. | |
LinkedIn has sold 7.84 million shares, raising $352.8m (£218.3m) and valuing the company at $4.25bn. | LinkedIn has sold 7.84 million shares, raising $352.8m (£218.3m) and valuing the company at $4.25bn. |
There have been concerns that social networking sites are creating a new stock market bubble, which will be exacerbated by LinkedIn's huge rise. | |
$4bn looks a very fancy price for a company with revenues last year of $243m and profits of $15.4m. | $4bn looks a very fancy price for a company with revenues last year of $243m and profits of $15.4m. |
That looks modest compared with the figures of $50bn and more being bandied around for Facebook's valuation. | That looks modest compared with the figures of $50bn and more being bandied around for Facebook's valuation. |
Both price tags will look dumb to those sceptics who see Facebook as an ephemeral craze for people with poor social skills and LinkedIn as little more than a glorified Rolodex | Both price tags will look dumb to those sceptics who see Facebook as an ephemeral craze for people with poor social skills and LinkedIn as little more than a glorified Rolodex |
It is the biggest technology flotation since the tech bubble burst in 2000. | |
On Wednesday, the price range for the initial public offering of the company was lifted from $32 to $35 a share to a range of $42 to $45. | |
LinkedIn is the first US social network site to get a share listing, and was being seen as a test of appetite for them. | |
Facebook and Twitter are both expected to seek stock market listings in the next few years. | Facebook and Twitter are both expected to seek stock market listings in the next few years. |
Before shares in LinkedIn started trading, the new price range had valued it at about 17 times its earnings from 2010. | |
That is about half of the valuation multiple being given to Facebook, but considerably higher than more mature internet stocks that already have stock market listings. | That is about half of the valuation multiple being given to Facebook, but considerably higher than more mature internet stocks that already have stock market listings. |
Google, which went public in 2004, has a market value of about six times its annual revenues. | Google, which went public in 2004, has a market value of about six times its annual revenues. |