If you hadn’t heard the news, LinkedIn is going public. Their stock will begin trading on Thursday, 5/19/2011 on the New York Stock Exchange.
This is big news for social media. LinkedIn is the first in a series of fast growing social media companies expected to go public. The other hotly anticipated social media public offerings include Facebook, Groupon and Zynga. As such, all eyes will be on LinkedIn to see how they fare in the public sector.
LinkedIn will be an interesting stock to watch.
Take a look at this recent chart on gigaom showing the rankings of companies on the secondary market:
As you can see, currently LinkedIn is ranking 3rd on the secondary market, just behind facebook and twitter.
Of course they do warn investors in their regulatory filing, “We cannot assure you that the price of our Class A common stock will equal or exceed the price at which our securities have traded on these private secondary markets.”
What does this mean for Social Media?
In the business and investing realm, social media companies are unique. Many social media companies have high valuations, but have yet to make any real money. Twitter for example has not yet made a profit, yet it is highly valued by investors. This flies in the face of traditional investing fundamentals. If one follows the Warren Buffet standard of investing, then these would not be safe investments at all. However, the world is changing.
LinkedIn is a small social media company compared to the juggernauts of facebook and twitter. However, they do have control in their niche being the largest social network for professionals. Keep an eye on how they do as they will be the barometer for how other social media companies will fare when they also go public.
Overall, this news tells us that social media is beginning to enter the world of traditional investing. Already, people are turning to social media to get their news before traditional media. It may not be long before these companies join the ranks of Microsoft, Apple, and Google as a staple investment in one’s portfolio.
LinkedIn is set to begin trading between $32 and $35 a share. Will you be investing in this company?
It’s not even out yet and it’s a hot stock! According to the LA Times today, LinkedIn has already upgraded their initial public offering price. They now plan to open their offering at between $42 to $45 a share. Who knows, maybe a lucky investor is poised to make it rich on this stock…?
LinkedIn is opening its shares today (5/19/11) at $45 a share. Analyst are expecting the stock price to rise today.