The nifty career-based social networking site LinkedIn announced its decision to go public, and the reaction on the first day of the company being traded has been fantastic. Initially, the service’s stocks were priced around $45 a share, but after a relatively short amount of time, the price of LinkedIn’s shares has almost doubled.

A quick glance at the current exchange rate finds that LinkedIn (LNKD) is being traded at $91.72 a share, clearly marking the early returns of LinkedIn’s IPO as a massive success. In fact, the LNKD stock opened trading at $83, almost a $40 increase of the initial share price. So what gives? Why has LinkedIn’s first day of trading been such a runaway success?

The Wall Street Journal has some ideas, which are related to confidence in the tech sector. In her lead sentence, Lynn Cowan offers this realistic take:

Social-media companies, take note: LinkedIn Corp.’s swift rise on its first day of trading Thursday proves that U.S. investors are hungry for similar stories.

Apparently, the dot com boom scare no longer exists and investors are willing to spend their money on tech companies, especially ones that are apart of the social media world. Cowan goes on to say that LinkedIn’s IPO is the largest Internet IPO since Google took Wall Street by storm. While the fear of another dot com bust has died down, as indicated by LinkedIn’s skyrocketing first day of trading, that fear hasn’t completely evaporated, something Cowan also points out:

…many across Silicon Valley and Wall Street say that investors are being taken in by a new Internet bubble.

Because LinkedIn’s initial foray into the world of public trading has been such a smashing success, people have begun speculating about what will happen if/when services like Facebook and Twitter go public. Apparently, the anticipation for these events is awfully high, something the LinkedIn IPO no doubt fueled. However, most, if not all eyes, are on Facebook, because once they go public, the thinking is, it will be harder for the lesser social media sites to compete:

Victor Shum, a partner in the San Francisco offices of Jeffer, Mangels Butler & Mitchell who advises technology firms on financing, mergers and acquisitions, and other business transactions [says], “If it works, there’s going to be a big push from a lot of social media companies to try to get out before Facebook does. Because once Facebook comes out, they’re not going to be able to get any analyst attention.”

Facebook may be the current golden calf, but the confidence surrounding its potential IPO is fueled directly by the success of LinkedIn. Granted, Facebook may ultimately sell for more stock, but it will owe a great deal of gratitude to LinkedIn for proving the confidence in trading social media companies is indeed high.

Lead image courtesy of a LinkedIn retweet.