Business Irish

Tuesday 19 November 2019

LinkedIn warns investors of risk in Ireland

Linkedin wary of instability in Ireland after €6.5bn float

Nick Webb

Linkedin, the €6.5bn-valued social media giant that floated last week, warned investors about the precarious economic and political situation in Ireland.

The company's prospectus revealed that it had warned investors about risks to its international operations.

"Expanding internationally may subject us to risks that we have either not faced before or increase risks that we currently face," the prospectus noted.

One of these risks was "political and economic instability in some countries, specifically in Ireland".

The Linkedin float was the most successful technology company debut since the dotcom boom. Shares rose 109 per cent on the first day of trading last Thursday. This compares to the heady days of the Yahoo float, when shares rose 154 per cent on the opening day of trading in 1996.

Netscape shares also doubled on their market debut, while Google had to make do with a mere 18 per cent rise when it floated in 2004.

However, many now fear that the frenzied buying of internet stocks is another massive investor bubble.

After its stunning opening day, Linkedin is now valued at an extraordinary 24 times its forecast sales for 2011. Using the same formula, Facebook would be worth an incredible €70m.

Linkedin now has more than 100 million users worldwide. Customers use the website to find jobs, recruit staff or look for industry experts.

There are more than 100 workers at its international hub in Dublin and the company is planning to recruit more workers here. It is not clear what level of share ownership there is in the Dublin office.

Linkedin founder Reid Hoffman -- an early backer of Paypal -- now holds shares worth €1.3bn.

Sunday Indo Business

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