initial public offerings (IPOs) trading on American exchanges

Tuesday, May 17, 2011

LinkedIn sees IPO pricing up by 30 percent to More than $405 Million

LinkedIn, which is set for an initial public offering on Thursday, is now on track to raise $405.7 million — up from an estimated $274.4 million earlier this month, according to a regulatory filing on Tuesday.

With investor demand surging for social media companies, LinkedIn, which has more than 100 million members in over 200 counties, said it plans to sell more than 9 million shares at $42 to $45 each.

Its current I.P.O. plans represent a 30 percent-plus increase from previous expectations. In early May, the professional networking site said in a regulatory filing that it planned to sell 7.8 million shares at $32 to $35 a piece.

LinkedIn is the latest in a flurry of Internet companies rushing to go public, amid strong investor appetite and improved market conditions. And social networking sites are among the most highly anticipated, with LinkedIn set to be one of the first major players in the United States to go public this year. At the top end of the range, the company is currently valued at roughly $4.3 billion, compared with more than $3 billion based on earlier pricing.

Other giants in the space are expected to follow with blockbuster offerings. Groupon, the social shopping site, is said to be considering an I.P.O. for later this year. Facebook, by far the largest social networking sites, could see a market debut in 2012.

An I.P.O. offers entrepreneurs and institutional investors a chance to cash out. LinkedIn’s chairman, Reid Hoffman, who is selling a small number of shares, will net an estimated $5.2 million, assuming the shares price at $45. His entire stake is $852.8 million. Goldman Sachs is the largest seller in the I.P.O., offering 871,840, the firm’s entire stake.

But it remains to be seen how well the stocks will perform in the public markets. The Chinese social networking site Renren priced its offering on the New York Stock Exchange at $14. While its shares closed at $18 on the first day of trading on May 4, the stock is currently trading at $12.60.

No comments:

Post a Comment