Linkedin IPO n its first minutes as a public company, Link edIn’s valuation has now shot to roughly $8.5 billion. Yes, that’s right. LinkedIn, which barely made $15 million in earnings last year, is worth $8.5 billioLinked In’s IPO, which priced last night at $45 a share, now has doubled in early trading, up to $90 a sharWhile this makes LinkedIn look like the greatest thing since sliced bread, there are a couple of huge caution flags in this monster opening jumpOne, the underwriters left a LOT of money on the table.
Given this level of demand for LinkedIn stock, this IPO could have been priced much, much higheThat would have meant more money into the coffers of LinkedIn, rather than into the pockets of the investment community. At $90 a share, LinkedIn and its selling stockholders would have raised $705 million rather than $352.8 millionSecond, the LinkedIn stock debut must raise huge questions about the private markets for selling shares in LinkedIn, Facebook, Twitter and other non-public companies. Shares of LinkedIn on those thinly traded markets such as SharesPost valued the company at $2.5 billion. If the private market valuations are off by so much, how much can we trust them.
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