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May 18, 2011

LinkedIn IPO frenzy -- would you buy the stock?

The coming LinkedIn IPO -- expected tomorrow -- may be a resounding success, as frothing-at-the-mouth investors appear eager to throw their money at big social media companies. The company is expected to prices its shares tonight and make them available on the stock market tomorrow, under the New York Stock Exchange ticker LNKD.

Potential share price: $42-$45.

Potential valuation: ~$4.25 billion.

So, here's the question: Would you invest in LinkedIn? This Reuters article outlines some of the risks in the marketplace for LinkedIn, including the fact that it has struggled with losses and profitability.

What happens when LinkedIn becomes directly accountable to Wall Street when it's public? Will it cut expenses and investment in future growth drastically to produce better profit margins?

In this Bloomberg video, Jonathan Merriman, a tech investor, explains the LinkedIn IPO and talks about the risks. Interesting stuff:


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About Gus G. Sentementes
Gus G. Sentementes (@gussent on Twitter) has been writing for The Baltimore Sun since 2000. He's covered real estate, business, prisons, and suburban and Baltimore City crime and cops. He was one of the first reporters at The Sun to use multimedia tools and Web applications -- a video camera, an iPhone -- to cover breaking news. He hopes to cover Maryland geeks and the gadgets and Web sites they build, and learn -- and share -- something new every day.

Gus has a wife, a young daughter and two feuding cats. They live in Northeast Baltimore.
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