LinkedIn IPO at $32-$35, Initial Public Offering of LNKD Stock to Hit $3B


The leading social network for professionals, LinkedIn, released the pricing details of its eagerly-awaited IPO this morning.  the company intends to issue 7.8 million shares (under the proposed ticker LNKD) at a range of $32 to $35. at the mid-point, the valuation would be $3.3 billion.

Yet it’s a good bet that the opening price will be 30% to 40% higher when the shares hit the market — which will probably be in the next week or so.

Founded in 2003, LinkedIn is a pioneer in Web 2.0. the company is a kind of Rolodex for the 21st century, allowing professionals to network over the Internet — without putting up with those goofy family photos and embarassing comments from ex-girlfriends that can abound on other social networking sites like Facebook and Twitter. LinkedIn is meant to be for professionals first, an imporant distinction that makes it unique.

LinkedIn’s growth rate has been consistently strong. now the website has over 100 million members.

More importantly, LinkedIn has created a variety of revenue streams, which include advertising, hiring solutions and premium subscriptions. the professional focus of the network allows it to offer businesses offerings for a fee as opposed to trying to win over clicks or dollars from a consumer-oriented audience. In fact, the company doubled last year’s revenue to $243 million, with net income coming to $15.3 million thanks to professional services.

Although, it looks like the company will begin to sustain losses as it invests aggressively in its business. but as (NASDAQ: AMZN) showed in 1997 when it went public with plans to lose money for a full four years before seeing a profit, digital businesses can win big with an IPO even if operations are running in the red. Enough buzz is surrounding social media offerings that LinkedIn should see good momentum in its early days thanks to strong demand.

What’s more, the timing for the IPO is spot-on. Just last week,Renren(NYSE: RENN) pulled-off a successful public offering.  Known as the “Facebook of China,” the company sports a valuation of over $5 billion.

Actually, the shares are selling at more than 100 times 2010’s revenue.  No doubt, this makes the LinkedIn IPO downright cheap with a multiple of 14.

It all adds up for an exciting IPO in the next week or two.

Tom Taulli’s latest book is “All About Short Selling” and his Twitter account is @ttaulli.  he does not own a position in any of the stocks named here.

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