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LinkedIn prices IPO at $45 a share

May 18, 2011 |  2:41 pm

LinkedIn Offices 1

LinkedIn's initial public offering priced at $45 a share Wednesday.

Shares of the social networking service for professionals will begin trading Thursday on the New York Stock Exchange under the symbol LNKD.

 The 8-year-old company will make its stock market debut with a value of $4.3 billion as investors clamor to get a piece of the most hotly anticipated IPO out of Silicon Valley in years and the biggest from a U.S. Internet company since Google set the gold standard nearly seven years ago when it went public.

In fact, its bankers boosted its price range this week, adding about $1 billion to LinkedIn's value.

Most analysts expect shares to rise Thursday.

Few Internet companies have tested the public waters since the dot-com crash. LinkedIn's lofty valuation -- some 20 times its 2010 revenue -- already has invited comparisons to the heyday of the last boom.

But the market's appetite for social networking companies, pent up for so long, seems to be running strong. And LinkedIn, which connects more than 100 million professionals online, has three revenue streams: online ads, premium subscriptions and hiring tools for recruiters.

LinkedIn's performance will be closely watched as a harbinger for other sought-after companies in the space such as Facebook, Groupon, Twitter and Zynga.

It will also mesmerize entrepreneurs in Silicon Valley who have seen private market valuations of social networking companies soar but have no clue what their businesses are worth in the public markets.

The IPO will also mark a big payday for LinkedIn's co-founder and chairman Reid Hoffman who, as an investor and an entrepreneur, has placed bold bets on and helped shape the Internet's hottest sector. 

Hoffman has a 20% stake in the company which this time Thursday will be worth $858 million. For more on Hoffman, check out this profile.

Chief Executive Jeff Weiner will also be in the money: His 2.5% stake is worth roughly $105 million.

RELATED:

LinkedIn raises price on IPO

IPO alert: LinkedIn set to begin trading on Thursday

LinkedIn values itself at about $3 billion before IPO

-- Jessica Guynn

Photo credit: Adam Barker

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