LinkedIn raises price on IPO
In another sign that anticipation among investors for a crop of new social networking companies is heating up, LinkedIn on Tuesday raised the expected price range of its initial public offering by 30%.
"There is crazy demand," said Colin Gillis, an analyst with BGC Partners who is not affiliated with LinkedIn.
LinkedIn now plans to sell shares between $42 and $45 apiece, lifting the company's valuation to more than $4 billion, according to a regulatory filing. At the upper end of that price range, LinkedIn could raise more than $405 million.
LinkedIn is boosting its price range even though it has told investors it plans to set itself up for future growth by continuing to invest in its business and will not turn a profit in 2011.
LinkedIn is set to begin trading Thursday on the New York Stock Exchange under the symbol LNKD, and investors will be watching it as a barometer for the social networking sector, which includes such sought-after companies as Facebook, Groupon, Twitter and Zynga.
One sign that the sector may not yet be red-hot: Shares of Renren, a Chinese social networking company that went public earlier this month, have dropped below the IPO price. And French social networking site Viadeo, LinkedIn’s chief rival, said on Monday it would shelve plans to go public.
-- Jessica Guynn
Photo: LinkedIn headquarters is shown in Mountain View, Calif. Credit: Paul Sakuma/Associated Press