In what is to be the first social network to go public, Linked In look set for a cash bonanza.
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The social networking site for professionals is tipped to float for US$3bn-$3.3bn value on the New York stock exchange, with plans to sell stock at $32 -$35 per share according to documents submitted to US Security & Exchange Commission.
The Silicon Valley giant now plans to sell 7.8m shares, including 3 m held currently by private investors.
And interest is high among institutional investors according to one analyst from IPO Boutique.
“The demand for LinkedIn is absolutely massive across the board,” analyst Scott Sweet told The San Francisco Gate.
“Do I think they’re thinking of holding it long term? No, I don’t. I think they’re trying to capitalise on the euphoria and will probably sell quickly.
The IPO, set to take place in the coming months, could put the internet company first launched in 2003, with a modest 4,500 users, in line for a cash windfall of $146m, according to reports.
According to the IPO filed in January, LinkedIn has 100 million users, turned a profit of USD$1.85 million on revenue of $161m during the first nine months of 2010.
Last week, it amended the figures and reported net income of $2.08m on revenue of $93.9m for the first fiscal quarter of this year.
More recently it began charging for some of its services which could point to the business model it may abide by once the IPO is done and dusted and shareholders are demanding growth at every turn. It also lists advertising and hiring solutions as among its revenue earners.
And it’s not just investors who are eagerly looking on as the Reid Hoffman founded networking giant goes public.
Facebook chief Mark Zuckerberg and a flurry of other Silicon execs will also be on the edge of their seat as the first of the social networkers sets sail to the trading floor.
That social network is also bracing itself to go public possibly sometime next year.
But considering the relatively limited profitability prowess these tech start ups, aside from Facebook, all less than ten years old have demonstrated so far, the true values placed on these companies is, as yet, unclear.
However, as LinkedIn demonstrated, the free for all internet service is turning itself around.
And some analysts now believe Facebook’s revenue “could be as high as $2 billion, fuelled by advertising growth.
And with its overwhelming ad display potential with 600m users it has been associated with a $60 billion market valuation figure.
Groupon, for which Google bid $6bn last year, Twitter and Skype and gaming company Zynga are also other hot favourites for going public.