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LinkedIn hopes for $32 to $35 IPO shares

- Associated Press - Monday, May 9, 2011

NEW YORK — Professional networking website LinkedIn Corp. hopes to sell its stock for $32 to $35 per share in an upcoming initial public offering. Its IPO may encourage other growing Internet services to make their stock market debuts during the next year.

The price target, set in a filing Monday with the Securities and Exchange Commission, signals that LinkedIn is nearly ready to complete its IPO. The shares are expected to be sold May 18, said IPO analyst Scott Sweet. The stock then would begin trading under the ticker symbol of "LNKD" on the New York Stock Exchange.

The company's debut could offer a preview of investor demand for other popular online services that connect people with common interests. Although they haven't set timetables, Facebook, Twitter, the online deals site Groupon and the game maker Zynga are among the other social-networking services expected to go public.

With more than 600 million users, Facebook is considered the hottest commodity of them all. The 7-year-old company's market value has been pegged at $50 billion, based on a private investment in January.

The company said the offering could raise up to $274 million, including the cash that would to go existing shareholders who are selling part of their stakes in the IPO. Based on the IPO's price targets, LinkedIn would have a market value of $3 billion to $3.3 billion.

Former PayPal executive Reid Hoffman founded LinkedIn eight years ago. Now a venture capitalist, Mr. Hoffman remains LinkedIn's chairman and largest shareholder with a projected post-IPO stake worth $600 million to $665 million.

LinkedIn's stock offering is expected to attract a lot of attention because it revolves around a well-known Internet brand with more than 100 million registered members.

Most of LinkedIn's revenue comes from fees it charges for recruiters and businesses that want expanded access to LinkedIn's website to help fill job openings. The company also sells online ads.

Last year, LinkedIn had net income of $3.4 million on revenue of $243 million. Its revenue totaled $94 million during the first three months of this year, more than doubling from the same period last year.

LinkedIn will offer 4.8 million shares. The company's current stockholders, including Mr. Hoffman, Bain Capital, Goldman Sachs and publishing company McGraw-Hill, will sell 3 million shares.

The company, based in Mountain View, Calif., said 94.5 million common shares will be outstanding after the IPO.

After paying investment banking fees and other expenses, LinkedIn estimated it will collect nearly $147 million from the IPO at the midrange target price of $33.50. LinkedIn plans to use the money for operations and possibly to buy other companies.

Morgan Stanley, Bank of America Merrill Lynch and J.P. Morgan are managing the offering.

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