It's official: LinkedIn plans to sell shares to public in widely anticipated IPO
LinkedIn Corp. plans to raise as much as $175 million in an initial public offering, the first major social networking site to plan its stock market debut.
The Mountain View, Calif., company which runs the largest networking site for professionals, filed a prospectus with the Securities and Exchange Commission on Thursday. It is widely believed that LinkedIn expects to raise about $200 million in the offering.
Barring any roadblocks, the 7-year-old company with 1,000 employees and 90 million users could go public in the next several months in one of the most anticipated offerings of the year. Investors have been clamoring for shares of the privately held company which has an implied value of $2.5 billion on private trading exchange SharesPost.
Internet IPOs look like they will be a hot commodity. Web content company Demand Media jumped 33% Wednesday in its first day of trading. Online coupon service Groupon Inc. is in talks about a possible public offering. Facebook Inc. likely will wait until 2012 for an IPO.
LinkedIn does not have the global girth of Facebook, which has more than 600 million users, but it has carved out a profitable niche in helping people hunt for jobs, recruit new employees or find industry experts.
Setting up a profile is free on the website, but LinkedIn makes money from paid subscriptions and advertising. It had revenue of $161.4 million in the first nine months of 2010, almost double the sales from the same period a year earlier, according to the prospectus. It generated net income of $10 million compared with a net loss of $3.4 million in the same period of 2009.
LinkedIn did not disclose the target price for shares which likely will be set closer to the actual stock sale.
LinkedIn was created in 2003 by former PayPal executive and Internet investor Reid Hoffman. It has raised more than $100 million.
-- Jessica Guynn
Photo: LinkedIn.com pages are displayed on computer screens in New York on Thursday, Jan. 27. Credit:Jin Lee/Bloomberg