LinkedIn Corporation (NYSE: LNKD) is the IPO of the day in the U.S. and it is one more check-mark on our own TOP 17 IPOs TO WATCH IN 2011. The deal has priced and after it was raised by about one-third the valuation is well over $4.2 billion. The deal priced at $45.00 per share for roughly 7.84 million shares. 24/7 Wall St. ran a poll among our readers on our open site and among our free newsletter readers and the initial indication is that the deal priced to high.
We would have liked to have seen more responses but on an individual issue sometimes you can only get so many real opinions. We generally like to see results of a poll having 1,000 answers before making an official prediction. The fact that there were 264 results as of 8:00 AM EST tells us that the interest has not chased the deal higher and higher, and the results show the number of responders who answered each choice on valuation per share and what the percentage rates are. Over half of our readers responded that the price is too high. When asked “How Much Is LinkedIn Worth Per Share?” the responses were as follows:
- Whoa, it’s already too high!… 147… 56%
- $42 to $45 is the top!… 50… 19%
- Over $60 per share!… 35… 13%
- $45 to $50 per share!… 19… 7%
- $50 to $60 per share!… 13… 5%
If you wanted to take the other side of the argument and argue that crowds are always wrong, then maybe the valuation is really much higher. If that is true, then the 5% crowd wins with a $50 to $60 per share valuation. The real test will be in 90 days and then in 180 days as more shares will start having a chance of coming to the market.
LinkedIn is only selling about 8% of its stock and the capital raise is going to be about $350 million. Perhaps the real winners were its venture backers: Goldman Sachs Group Inc. (NYSE: GS), McGraw Hills Companies (NYSE: MHP), and a unit of SAP AG (NYSE: SAP).
The secondary winner of today’s IPO is of course none other than Mark Zuckerberg and the rest of the kids over at Facebook, who have reportedly been having discussions with investment bankers in recent days and weeks.
We have heard that a premium open is coming on top of the $45.00 price, but the limited response from our readership gives us some pause about being overly excited up at these prices.
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JON C. OGG