Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
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LinkedIn (profit: $US15m) soars to $US9b value on market debut

Welcome to the new internet bubble. Sam Morgan calls the business networking site "the canary in the coal mine."

NBR staff
Fri, 20 May 2011

Welcome to the new internet bubble.

Commentators who think technology companies are returning to valuations have plenty to fulminate about this morning - and LinkedIn IPO investors plenty reason to crack the champagne.

"LinkedIn is the canary in the coalmine - watch it closely," TradeMe founder Sam Morgan tweeted as the action heated up.

Valuation: $US8 billion
The business networking site debuted on the New York Stock Exchange today [NYSE: LNKD] at $US45, rising as high as $US122.70 before profit taking saw a fade in late trading to $US94, a 108% gain that values the company at $US8.9 billion.

The valuation is 36 times LinkedIn's revenue, compared to Google's first day of trading in 2004, which gave the search giant a valuation of 5.5x revenue.

Income: $15 million
According to the Wall Street Journal, which has cited accounts circulated ahead of the IPO, In 2010, revenue at LinkedIn doubled to $243 million and net income was $15.4 million, compared with a loss of $4 million a year earlier. In the first quarter of 2011, revenue also doubled to $94 million and net income rose 14% to $2.1 million from a year earlier. The company has told investors it expects no income this year as it reinvests profits for growth.

350,000 NZ members
A rep for LinkedIn Australia-New Zealand LinkedIn managing director Clifford Rosenberg recently told NBR it had more than 350,000 users in New Zealand, more than 2 million in Australia, and 100 million worldwide. The site's sources of revenue include premium accounts and recruitment advertising.

Who' next?
LinkedIn has now become the most successful IPO on the NYSE this year ... that is, until GroupOn makes its market debut. Having snubbed a $US6 billion offer from Google, GroupOn (which launched in New Zealand earlier this month) is now targeting a $US19 billion valuation (that is, higher than Google's IPO). Other IPO contenders include Facebook, Twitter and Zynga, a maker of widly popular social network games like Farmville.

LinkedIn founder now billionaire
LinkedIn founded in 2002 by former Apple and PayPal executive Reid Hoffman in 2002, and launched in 2003.

Forbes puts Mr Hoffman's wealth at $US1.7 billion after today's IPO.

Its current chief executive is Jeff Weiner whose holding, following today's frenzy, is now worth around $US200 million, according to the Wall Street Journal. 

NBR staff
Fri, 20 May 2011
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LinkedIn (profit: $US15m) soars to $US9b value on market debut