Groupon, Facebook, Ahead?
If Wall Street didn’t know what LinkedIn was, they sure do now. On Thursday, LinkedIn more than doubled in its New York Stock Exchange (NYSE) debut, shooting up 109% to 94.25 in its first day of trading after rising up to 122.70.
The demand of social networking is huge. LinkedIn made $15.4 billion in 2010 and is currently valued at more than $8 billion. Unlike its competitors, the site focuses on business professionals and not teenagers and grandparents who interact among friends and family. Although it’s free to join, about 42% of LinkedIn’s revenue comes from the over 3,500 subscribers who use the site for new hires, followed by 33% from advertisers and 25% from upgrade, paid subscriptions.
The question is raised, was the offering price generous, maybe even too high, and is there a “dot come” bubble forming around social networking? On Thursday, shares were offered at $45, but the stock quickly rose to prices exceeding $100 per share. According to the NYSE, they’ve began slowing down a bit, selling for around $85 per share as of 10:30 this morning – still higher than the $45 per share initial price.
The shift to social media is growing rapidly and expected to change how people access content and search for information, which is everything that Google represents.