May 19, 2011, 12:32 PM — Shares of LinkedIn (NYSE: LNKD) nearly tripled over their offering price of $45 in the professional social networking company's stock market debut on Thursday.
By late morning, shares were selling at 122.70 -- that's a gain of 173 percent -- before falling back shortly after noon to 104.46. Share volume around noon was 17 million. The low selling price Thursday morning was $80 a share.
(Also see: LinkedIn ups IPO price target range)
LinkedIn's spectacular showing in its first day on the New York Stock Exchange undoubtedly will whet investors' appetites for more social media IPOs. You can expect that a number of social media companies will rush to cash in on what could be the next Internet stock bubble.
LinkedIn soared right from the opening bell, with shares selling at $83, up 84 percent from the IPO offer price. At more than $90 a share, LinkedIn's value approaches $9 billion.
The $45 offer price valued the company around $4.3 billion.
LinkedIn initially planned to sell 7.84 million shares in the $32 to $35 range, but earlier this week the company, sensing surging demand, upped the price range to $42 to $45 and the total shares offered to 9.02 million. Good call.
About 3 million of the shares were sold by current stockholders, so those proceeds won't go into LinkedIn's coffers.
LinkedIn's revised S-1 put it on a path to raise $270.2 million at $45 a share. Clearly it's going to do a lot better than that.
The company has more than 100 million members and reported 2010 revenue of $243 million -- versus $120.1 million in 2009 -- and net income of $15.4 million. That's up from a loss of nearly $4 million the previous year.
Several other social networking companies such as Facebook, Zynga, Twitter and Groupon have raised millions of dollars selling shares on the private market. If LinkedIn's experience is any indication, the real big payoff awaits when they go public.
None have filed for an IPO, but that should change soon. The social-media iron is red-hot right now.
And the bubble is expanding.