And the winner for first social media platform to go public is... LinkedIn! What was rumored to happen within the first three months of this year was officially set in motion last night when the social business network filed a registration statement with the SEC.
As per usual LinkedIn hasn't revealed many details. "The number of shares to be offered and the price range for the offering have not yet been determined,’ wrote Steve Sordello, LinkedIn’s CFO, in a blog post on the company’s website. ‘A portion of the shares will be issued and sold by LinkedIn and a portion will be sold by certain stockholders of LinkedIn.’
What we do know is that the company's initial fundraising target is US$ 175 million. How much you wanna bet they'll exceed that number?
According to SharesPost, a secondary market for trading shares in private companies, LinkedIn is worth $2.51 billion, up from the US$ 1.9 billion it was valued at in April. That number will likely continue to rise as the IPO approaches.
LinkedIn is obviously being aggressive about these moves, but we wonder if this path the best for the professional networking company.
On one hand we have Accel Parterns' Jim Breyer, an investor in Facebook and Groupon who wouldn't take LinkedIn public at this point in time. “I like to wait a little bit longer,” he said. “And certainly the advice we give to our CEOs is take time, remain private as long as you can, build the business, build the profitability, and most importantly keep the product passion that is the definition of all the great companies out there.”
On the other side of the fence, "Investors are looking for smaller, high-growth Internet companies," claimed TCW Group media analyst Anthony Valencia. "There have been a dearth of those going public over the last couple of years. That trend could continue this year. So that could be a sweet spot for LinkedIn to do an IPO."
Further, a social company that goes public now would be able to take advantage of the investor interest built around this sector without competing against Facebook for attention. Everyone's favorite social network is expected to go public something over the next 18 months, and in the wake of that behemoth, who's going to pay attention to smaller companies following suit?
If you're interested in a bit of light reading, you can dig up what you're able to in LinkedIn's length S-1 registration statement here.