IPO alert: LinkedIn set to begin trading on Thursday
LinkedIn may make the most important connection of its eight-year life on Thursday, when it's expected to debut on the New York Stock Exchange.
It plans to trade under the symbol LNKD and hopes to raise as much as $274 million.
Talk about hotly anticipated initial public offerings -- LinkedIn, a social networking site for professionals, is the first in a series of established and fast-growing companies in the sought-after sector expected to go public in the next year or two, including Facebook, Groupon and Zynga.
LinkedIn will serve as a barometer for the sector. But it's still puny (six times punier to be exact) compared with Facebook, which has more than 600 million users and has been valued at $50 billion in a funding round that closed in January.
LinkedIn is planning to price its offering of 7.8 million shares between $32 and $35 a share, which would give the company a valuation between $3 billion and $3.3 billion, nearly 200 times last year's earnings of $15.4 million. Research firm eMarketer estimated last month that Facebook would rake in $4 billion in advertising revenue this year.
LinkedIn's lofty valuation is not the only gamble for investors. Shares of LinkedIn have traded on the secondary markets as high as $31 a share.
"We cannot assure you that the price of our Class A common stock will equal or exceed the price at which our securities have traded on these private secondary markets," LinkedIn said in a regulatory filing.
In another development, Viadeo, the second-largest social network for professionals behind LinkedIn, has shelved plans for an initial public offering. The French-based company had been considering an IPO in the United States, Europe or Hong Kong.
-- Jessica Guynn