LinkedIn IPO Prices Value Company at Over $4 Billion
LinkedIn is expected to launch its IPO on Thursday to the tune of 7,840,000 shares of class A common stock. The company said in an SEC filing that it expects shares to sell for $42 – $45. The filing says:
LinkedIn Corporation is offering 4,827,804 shares of its Class A common stock and the selling stockholders are offering 3,012,196 shares of Class A common stock. We will not receive any proceeds from the sale of shares by the selling stockholders. This is our initial public offering and no public market currently exists for our shares of Class A common stock. We anticipate that the initial public offering price will be between $42.00 and $45.00 per share.
Following this offering, we will have two classes of authorized common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock will be identical, except with respect to voting and conversion. Each share of Class A common stock will be entitled to one vote per share. Each share of Class B common stock will be entitled to ten votes per share and will be convertible at any time into one share of Class A common stock. Outstanding shares of Class B common stock will represent approximately 99.1% of the voting power of our outstanding capital stock following this offering, and outstanding shares of Class B common stock held by our co-founder and board Chair, Reid Hoffman, will represent approximately 21.7% of the voting power of our outstanding capital stock following this offering.
Valuations for the company based on the stated price range are being reported as up to $4.3 billion. Not bad for a social network that isn’t Facebook.
Earlier this month, the company celebrated its 8th birthday:
So what has LinkedIn been up to lately? Here are a few things they’ve done recently:
- LinkedIn announced the launch of a new platform last month, that some see as a competitor to Facebook’s social plugins. While it’s unlikely that this will have the impact on the web that Facebook’s presence has, it could make a huge splash on the professional web.
- The company recently launched a feature phone app, expanding its mobile presence beyond smartphones.
- LinkedIn launched a new social news product designed to let users see the top news in their fields they’re interested, as shared by those in said fields. The product is called LinkedIn Today.
- LinkedIn Skills was introduced in beta earlier this year. This is product aimed at showing areas of expertise, and who has the skills in these areas. Essentially, it’s a way people to see the top talent in the industry for individual skills.
These are just a few things the company has introduced this year. A recent report found that LinkedIn matches newspapers as a job search tool for students.
In the SEC filing, LinkedIn counts exclusive focus on professionals, a large and growing global member base, a business model with powerful network effects, it being robust and trusted source of relevant professional data, a large customer base, and its proprietary technology platform as its competitive strengths.
In March, LinkedIn hit the 100 million member mark. Still, the company will always run the risk of users losing interest because of other social networks like Facebook and Twitter, which have both been proven to be reputable tools for recruiting and finding jobs, and of course just professional networking.
Is LinkedIn’s valuation too high, too small, or just right? Tell us what you think.