LinkedIn's IPO: A proxy for an eventual Facebook IPO

LinkedIn priced its initial public offering at $45 a share, giving the company a valuation of roughly $4 billion. The IPO price, which was raised, indicates a voracious investor appetite for social networking plays.

LinkedIn priced its initial public offering at $45 a share, giving the company a valuation of roughly $4.5 billion. The IPO price, which was raised, indicates a voracious investor appetite for social networking plays.

The big question is what happens once a few more social networking companies go public. Is LinkedIn just a warm up for Facebook? Or Zynga? Or Groupon?

LinkedIn will trade under the ticker LNKD on Thursday, according to a statement. On Tuesday, the company raised its price range to $42 to $45 a share, up $10 from the previous range.

So what do you get for your money?

  • 100 million members in more than 200 countries and territories.
  • 2010 revenue of $243.1 million.
  • 2010 net income of $15.38 million.
  • First quarter revenue of $93.9 million and net income of $2.07 million.
  • Targeted advertising to a B2B audience.
  • A play on HR since LinkedIn has hiring services and subscriptions used by 4,800 companies.

The company in SEC filings has warned that it expects revenue growth to slow going forward and that it won't be profitable in 2011. Then again, LinkedIn is investing for future growth. Toss in the fact that many LinkedIn users aren't regular users and you have all you need for quite a debate.

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