According to WSJ, LinkedIn is seeking an IPO worth $3 billion! Now, considering how Gilt Groupe received $138 million in funding, $3 billion doesn't seem too ludicrous.
LinkedIn said Monday it plans to sell 7.84 million shares at an estimated price range of $32 to $35 apiece, raising as much as $274 million. The price range values the entire company between $3 billion and $3.3 billion. The shares will trade on the New York Stock Exchange under the symbol LNKD.However, buyers beware. I'm skeptical of the recent social media bubble with Facebook and Twitter. Let's not repeat what happened in another dot-com fiasco please.
There is a pattern going on with the valuation of websites. As of now, there are reports that some Facebook investors are wanting to sell their stock but aren't getting a price that it is supposedly valued at. Twitter, has received all this funding despite its inability to produce a viable profit model. While the Gilt Groupe is a growing company, it seems like too much is being expected of it. And now LinkedIn. While LinkedIn is a powerful tool for networking, I think it has growth limitations. LinkedIn wil never be able to capture a fraction of the public that Facebook has. While I don't think LinkedIn is going anywhere soon, I think investors should be wary of building these lofty dreams for a company whose potential is limited.
ReplyDeleteI would say that the problem with LinkedIn is that it does not allow individuals to actually communicate with each other as easily as twitter and Facebook. But, I will say that this was completely unexpected. I have a LinkedIn myself, but do not use it as often as I use Facebook and Twitter. I wonder if they will actually be able to meet market demands and what they plan to do with the money and grow in the long-run.
ReplyDeleteNot only that, but I wonder if Facebook will become a public company. That stock's valuation will be unreal and not affordable for the average person.