Tuesday, February 1, 2011

Linkedin is going public - is the time right?

Linkedin is the first of the new social starting stars with over 90 million users.
Linkedin is a social met work for professionals and has a basic free service. Users cam have better search function or other services if they pay a membership fee. Linkedin is right now at a value of almost $3 billion on the second market.

Linkedin started in November to find banks for their public offering process, interviewing bankers in early November before choosing Morgan Stanley, Bank of America Merrill Lynch and JPMorgan Chase as its three lead advisers

Is the time right for an I.P.O?
A lot of people are waiting for Facebook, twitter and Groupon to go public. The hype for social is big and being the first to go public might boost the stock market for linkedin.
But on the other hand, many people might want to wait and see where it is going. Linkedin is much smaller in user base than Facebook or twitter and much less revenue than Groupon, and therefore the initial offering should be pretty low per stock.
It might have been smarter to wait till Facebook goes public, because many people won't want to spend $80 or $120 on a stock from FB and therefore might to buy linkedin stocks just to be in the social stock trading.

On the other hand linkedin can now need the money to expand more aggressive in Europe. Xing is still market leader in Europe as a professional social network.

It will be interesting to see how linkedin will perform on Wall Street and it will be slight indicator for Facebook and Groupon how the public and Wall Street is taking social companies.

Facebook is pretty smart to wait till a few of it competitors are public to learn from their mistakes. Facebook understood early that as a market leader it is not always the best to be the first. And nobody has yet experience with social platforms on the stock market.

Google learned in the time back a lot by watching other companies going public and chose the best time to file for IPO. Google was able to digest all what was going on and could therefore modify their approach that they even came up with a new way how people could reserve stocks.

I think linkedin could perform better if they would have wait to be the third or second one on the stock market in the US.

It will be interesting to watch. And if you have few thousand available, then buy linkedin stocks and sell them when Facebook goes public to use the money for Facebook stocks. Keep them 18 months and then in vest the winning in Apple or Asia, this is never wrong.

- Posted using BlogPress, please follow me on twitter @schlotz69

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