Sunday 22 April 2018

LinkedIn IPO set to raise $4.3bn

Peter Flanagan

THE technology boom went up another notch last night as business networking site LinkedIn was expected to go public with an initial public offering valuing the site at around $4.3bn (€3bn).

The company, which employs more than 100 staff in Ireland and is recruiting more, was expected to go public with its stock valued at between $42 and $45 a share, far above the $32 to $35 it had set as recently as last week.

Previously, private shares of the site traded at an implied valuation of $2.5bn on a secondary market.

The IPO will net founder and chairman Reid Hoffman as much as $853m once the company starts trading today.

The share offering is also being seen as an acid test for what has been described as the latest "technology bubble".

Social networking giant Facebook has an implied value of some $60bn, while an investment in Twitter by JP Morgan valued the micro-blogging site at some $4.5bn.

Doubt has been cast on those valuations, with some commentators comparing the current frenzy around tech stocks to the tech bubble earlier this century.

Renren, a Chinese social networking site that has been described as the "Facebook of China" stormed US markets earlier this month with an IPO that valued the company at $855m and had a 29pc share jump on the first day of trading.

Since then, though, it has dropped back and is now trading below its IPO value of $14. And in the fervour surrounding the rush to be the first major US social networking company to go public, investors may overlook some risks that could sour LinkedIn in future, analysts say.

One of the biggest risks may be LinkedIn's gutsy bet on its future growth -- combined with an admission that it does not expect to be profitable in 2011. (Additional reporting by Reuters)

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