It’s on: the first floatation of the social networkers is underway.
Reid Hoffman’s LinkedIn has fired the first IPO shot – and many others are to follow, analysts believe.
LinkedIn are preparing their very first IPO this week following the announcement the networking site for professionals will go public, paving the way for the likes of Facebook, Twitter and even Skype to follow suit.
The flotation of the company, due in the coming months is the first of its kind among the social networkers, means the market value on such sites will be clearly defined for the first time.
Mark Zuckerberg and co will be eagerly awaiting the reactions on the trading floor.
These online wonders which have all witnessed a huge growth surge have been “waiting for one of them to step their toes in the water,” Scott Sweet, managing partner of IPOBoutique said.
“It’s almost like they are saying, ‘Who’s going first?'”
The IPO which will involve the floating of at least $175m os shares on the public exchange looks set to make LinkedIn founder Reid Hoffman, who has a 21% stake, a very wealthy man.
Hoffman, who was an early investor in Facebook will also benefit from the social network valued at $50bn eventual floatation, which they say will be laid out by April 2012.
His stake alone could be valued at $642m according to reports.
According to the IPO filed last Thursday, LinkedIn which has 90 million users, turned a modest profit of USD$1.85 million on revenue of $161m during the first nine months of 2010.
Its growth has also been impressive – from just 4,500 users back when it was first founded in 2003, with both employees and employers looking up each other professional profiles, and is used both as a recruitment and networking tool worldwide.
It has more than one million users in Australia.
If successful, LinkedIn could rewrite the entire value placed on public online forums and create momentum for extraordinary market growth for Facebook, Groupon and even Twitter as the focus switches to the monetary value of these companies.
The eight year old company based in Silicon Valley has already received private backing to the tune of $103m.
Others tipped to go public include group purchasing firm Groupon, which last year Google made a $6bn bid for, Twitter, which has recently seen its popularity sky rocket as well as gaming company Zynga.
Skype is also another player earmarked to follow LinkedIn’s IPO.
This looks set to change the nature of the Silicon Valley giants from sideline phenomena to listed corporate powerhouses.
“These companies are more mature, their sector is more defined, and they have better income,” said Francis Gaskins, president of IPOdesktop.com said in an AP report.