September 26, 2023

DealBook: LinkedIn Raises I.P.O. Goal to More Than $405 Million

LinkedIn, which is set for an initial public offering on Thursday, could raise more than $405 million, up from an estimate of $315 million earlier this month, according to a regulatory filing on Tuesday.

As investor demand for social media companies has surged, LinkedIn, whose networking site for professionals has more than 100 million members in over 200 counties, said it planned to sell more than 7.84 million shares at $42 to $45 apiece. The underwriters have the option to sell additional 1,176,000 shares, depending on the appetite for the offering.

Its current pricing plans represent an increase of more than 30 percent from previous expectations. In early May, the company said in a regulatory filing shares at $32 to $35.

LinkedIn is the latest Internet company rushing to go public, amid strong investor interest and improved market conditions. Social networking sites are among the most sought after offerings, and LinkedIn will be one of the first major players in the United States to go public this year. At the top end of the price range, the company is now valued at about $4.3 billion, up from more than $3 billion based on earlier pricing.

Other big names in the space are expected to follow suit, with Groupon, the social shopping site, said to be considering an initial offering later this year. Facebook, by far the largest social networking site, could make its market debut in 2012.

An initial offering allows entrepreneurs and institutional investors a chance to cash out. LinkedIn’s chairman, Reid Hoffman, who is selling a small number of shares, will net an estimated $5.2 million, assuming the shares price at $45. At that price, his entire stake is worth $852.8 million. Goldman Sachs is to be the largest seller, offering the firm’s entire stake of 871,840 shares.

But it remains to be seen how well the stock will perform in the public markets. The Chinese social networking site Renren priced its offering on the New York Stock Exchange at $14.

While its shares closed at $18 on the first day of trading on May 4, the stock is currently trading at $12.60.

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