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Lise Buyer, banker who guided Google IPO, talks about LinkedIn IPO

May 20, 2011 | 11:18 am

LinkedIn shattered expectations Thursday as its shares soared nearly 100% just minutes after its first day of trading began, creating the kind of excitement for an Internet IPO not seen in nearly a decade.

LinkedIn Offices 4The stock continued to hold its own Friday, trading as high as $107 a share.

We spoke with Lise Buyer, founding principal of IPO consulting company Class V Group and the former investment banker who helped guide Google through its IPO in 2004.

Q: Did you expect the LinkedIn IPO to pop the way it did on Thursday?

A: There is no way ever to know what's going to happen on day one and particularly yesterday, when there had been so much activity in the private markets. Clearly when they raised the estimated range and then when they priced LinkedIn at the top of the range, that was a pretty good signal that they thought there would be significant after-market demand. But it's impossible to predict what the retail investor will do. People who are chastising the banks for having dramatically underpriced it aren't really being fair. You can't predict what will happen.

 Q: What does it mean for future Internet IPOs?

A: LinkedIn wanted to get out before Facebook. But I don’t think Facebook is going to change its behavior because of LinkedIn. It will go when it's good and ready to go. I think that in some boardrooms today  people are looking at what happened to LinkedIn and they are saying, "Maybe we can be next." But that's a little short-sighted unless you are a high-profile brand consumer Internet company with a couple hundred million dollars in revenue.

Q: Do you think it was smart of LinkedIn to take so long to launch an IPO?

A: Ten years ago companies went to the public markets before they were ready. Taking 10 years to build a business is the right thing to do if that's what it takes. Hats off to them. That's where the secondary markets come in. Private exchanges like Sharespost and SecondMarket have eased some of the pressure on companies to go public too soon.

Q: What do you think of all the talk of another Internet bubble?

A: There is no question that the reaction to the LinkedIn IPO demonstrates a frenzy for that one stock. But one company or group of companies do not a bubble make.

Q: What does the performance of LinkedIn's IPO tell us about investor interest in social networking?

A: I think on the institutions side, the enthusiasm tells us that professional investors are looking for high-growth profitable companies with compelling stories to tell. On the individual investor side, it tells us we haven’t learned anything. Everybody wants to own a piece of something they know about. Consumer brands almost always have an advantage when they go public. It also tells us that individuals are feeling favorable about the stock market again.

Q: What does the warm reception of the LinkedIn IPO tell us about what kind of reaction Facebook will get?

A: One would probably not be wrong to extrapolate wild expectations.

Q: What other impact will we see from Thursday’s IPO?

A: On the secondary markets, what happens to stocks like Zynga and Facebook. Let’s hope this wild enthusiasm is well founded.

RELATED:

LinkedIn's share price more than doubles in IPO 

As LinkedIn's IPO soars so do questions about pricing

LinkedIn IPO skyrockets, trades as high as $92.99 a share

-- Jessica Guynn

Photo: LinkedIn offices in Mountain View, Calif. Credit: Adam Barker/LinkedIn

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