People looking to LinkedIn's IPO as a bellwether for how social media sites would do in the stock market are happy today as the stock more than doubled in its first day, after sales in it were delayed for half an hour just in an attempt to match supply with demand.
'Biggest IPO Since Google'
"Surveying the exchange's crowded trading floor, one CNBC commentator observed that it looked like 1998, the peak of the dot-com craze," reported the San Jose Mercury News, which was so excited about the possible return of the Silicon Valley heyday that it made two typographical errors in its story.
"It’s been a decade since there was any froth in the IPO market, and everybody knows the stock market loves a frothiness in IPOs," wrote the Wall Street Journal.
Articles noted that it was the biggest IPO since Google. At the same time, some people -- in a kind of PTSD caused by the popping of the IPO bubble some years back -- wonder if we're just setting ourselves up for failure again. That's why you'll see things like in the Economist, with one article listing all the rationalizations out there about Why This Time is Different, and, hedging their bets, another article on the same date with a more Eeyore perception of how it's yet another bubble.
The stock opened at US$ 83, immediately went to US$ 90, dropped to slightly below US$ 83, rose sharply to US$ 115, dropped to US$ 100 as flippers took some profits and hung around the US$ 105s since then.
LinkedIn's initial public offering was expected to be valued at US$ 32 to US$ 35 a share, raising US$ 260 million and giving the company a valuation of up to US$ 3.3 billion. Due to expected increased demand, the company earlier this week raised its share price to US$ 42 to US$ 45, giving it a valuation of up to US$ 4 billion.
How LinkedIn did in its IPO was important not just for itself, but for a number of other pre-IPO social media companies, including Facebook Inc., Twitter Inc., Zynga Inc. and Groupon Inc., that were waiting to see how LinkedIn did.
After today, it should be safe to say that we'll be seeing more IPOs in this market space.