Tech Crunch reports that shares of career-orientated social networking site LinkedIn (trading under the symbol LNKD) began trading on the New York Stock Exchange on Thursday, May 19, and skyrocketed by 140 percent from its debuting cost of $83 per share, to a high of $122, to close at $93.86 per share. Originally priced at $45, it was expected the stocks would open between $78 and $82. Now, LinkedIn is valued at over $8.9 billion.
These numbers mark the biggest Internet company initial public offering (IPO) since shares of Google became public back in 2004. LinkedIn is one of the first social networking sites to go public, and rumors abound that other social media companies such as Facebook and Groupon are readying their own IPOs.
There are over 100 million users registered on LinkedIn, which was started just eight years ago. The company made only $15.4 million last year, yet was estimated to be valued at about $4.25 billion, which was almost one billion higher than initially estimated. According to Mashable, the new valuation of LinkedIn at $8.9 billion places the company’s worth higher than such established companies as Tiffany & Co., Chipotle, and Expedia, to name a few.
Many are skeptical, however, and fail to see the benefit of LinkedIn. Some have raised concerns that the high prices of LinkedIn’s IPO mirror the tech bubble of the 1990s, and the high values of Internet-based companies may be inflated, signaling another bubble. Others note that many of these companies attract millions of users yet have not demonstrated a business model that is sustainable. However, others are more optimistic, yet cautious, saying it is time for LinkedIn to take action and live up to these high prices.
While it remains to be seen whether LinkedIn will live up to the hype, there’s no denying the relevance of prevalent social networking sites. At SLS Consulting, we create unique legal Internet marketing plans for our clients, based on their goals. One of the important parts of these plans includes becoming involved on social networking sites. To learn how we can help your law firm increase its online presence, call us today!