LinkedIn insiders preparing to unload shares
The LinkedIn lockup is almost over and shareholders are winding up to sell more than 6.7 million shares. They are looking to realize gains in the stock, which has risen 74% since its initial public offering in May.
Bain Capital is unloading its entire stake in the professional networking company now that the lockup period restricting insider sales is expiring, according to filings with the Securities and Exchange Commission. Bain led a $53-million investing round in LinkedIn in 2008 which valued the company at more than $1 billion.
LinkedIn Chief Executive Jeff Weiner, its chief financial officer Steven Sordello and director David Sze are each selling 10% percent of their holdings. Chairman and company co-founder Reid Hoffman isn’t selling any shares. His stake in the company is worth more than $1 billion.
LinkedIn insiders will hit the sell button Nov. 21 when the company's six-month lockup ends. The sales will nearly double the number of shares available on the stock market. LinkedIn has benefited from the limited number of shares currently trading. Shares slid 7% to $72.80. LinkedIn closed as high as $109.97 in July but fell to the low $70 range in August.
LinkedIn also said it plans to sell almost 1.3 million shares to propel its growth.
LinkedIn's initial public offering was the biggest tech IPO since Google in 2004. It posted a loss in the third quarter as its revenue more than doubled. It was its first as a public company, as LinkedIn spends to expand its offerings around the globe. The company has more than 135 million members.
Analyst Mark May at Barclays Capital says he remains bullish on LinkedIn.
"We believe the uniqueness of its global user base, the competitive moat created by network effects, the significant opportunity to expand share in both the corporate recruiting and advertising sectors, and the meaningful upside potential in margins all point to an ability for LinkedIn to sustain hyper growth and recognize significant margin expansion over time," May wrote in a research note.
LinkedIn also announced a new app on Tuesday that with one click uploads to your phone a business card and all its contents.
-- Jessica Guynn
Photo: LinkedIn founder Reid Hoffman, center, and Chief Executive Jeff Weiner, right, after the opening bell at the Big Board as the company went public. Credit: Mike Segar / Reuters