DealBook: LinkedIn Prices I.P.O. at Top of Forecast at $45 a Share

8:36 p.m. | Updated

The professional social network LinkedIn priced its public offering at $45 a share late Wednesday, at the top of its expected price range.

At that price, LinkedIn will raise $352.8 million, valuing the company at $4.3 billion. It is set to offer 7.8 million shares, with shareholders selling about three million shares.

The underwriters have the option to sell an additional 1.1 million shares, which would increase the total amount raised to $405 million.

LinkedIn, which is set to go public Thursday morning on the New York Stock Exchange, is one of the most eagerly awaited initial public offerings in years.

While many Internet companies plan to go public in the next 12 months, LinkedIn is the first social media company to do so this year in the United States.

At $352.8 million, Linkedin’s offering will be the fifth largest for the Internet software and services sector in the United States, according to data from Capital IQ and Standard Poor’s. Google’s offering in 2004 still stands as the largest, at $1.67 billion.

LinkedIn’s valuation has surged in the last month, amid rising investor demand for social media companies.

Early this month, the company set its price range at $32 to $35 a share, at a roughly $3 billion valuation. Private shares of LinkedIn, meanwhile, traded at an implied valuation of $2.5 billion on SharesPost, a secondary market.

On Tuesday, buoyed by growing investor interest in the offering, the company raised its projected range sharply, to $42 to $45 a share.

“LinkedIn is definitely a beneficiary of the social networking trends,” said Aaron Kessler, an analyst at ThinkEquity. “The valuation implies a lot of excitement. It’s one of the first ways to get into social in a public forum.”

Still, analysts have raised concerns that LinkedIn’s valuation is running ahead of its fundamentals. The company recorded revenue of $243.1 million in 2010, with net income of $15.4 million. It also warned investors, in its recent filing, that it expected its revenue growth to slow as costs increased. It said it did not expect to be profitable in 2011.

The site, which reports about 100 million members, derives most of its revenue from advertisers and recruiters who pay for hiring solutions. Based on its current growth trajectory, LinkedIn is selling for roughly 46 times 2011’s projected earnings, according to Abelardo Mendez, an analyst for GreenCrest Capital. “It’s very rich. This is a challenge for investors. LinkedIn’s revenues doubled last year, but will they double again in 2011?” Mr. Mendez said.

LinkedIn will trade under the symbol LNKD. Morgan Stanley, Bank of America Merrill Lynch and JPMorgan Chase are running the offering.

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