LinkedIn IPO & first trading day at NYSE

[timhau]

To those who thought the insanity of the dot-com bubble could never happen again:

LinkedIn Corporation, a business-oriented social media company, had its IPO yesterday. It was priced at $45 a share. Today was the first trading day for the LinkedIn share, and it closed at $94.25, topping at $122.70. This translates to a four-figure Price-per-Earnings multiple.

Hee haw! Party like it's 1999!

 

[MarkyX]

Someone at the underwriting department screwed up.

 

[Almo]

Woa. Had I known it was going public, I might have bought some. I got my current job by a cold contact over LinkedIn. And it's an awesome job! (I have to say that because the boss seems to be omniscient...)

 

[timhau]

It may be a good company providing a valuable service, but the stock valuation borders on insanity. The company is now worth something like 40 times its yearly revenue.

 

[djpar]

Consistent with the idea of a top in equities.

Like I said, late May - early June top and then multi-year bear market.

 

[timhau]

It's 100% consistent with social media companies being overvalued. Morningstar puts the fair value of LinkedIn stock at $27; personally, I'd never pay even that much for it, but then again, I generally don't like paying a premium for rosy forecasts of future growth that may never happen. I have very little knowledge about social media business, but it sounds to me like it would be one with no moat -- the top dog can change very quickly. Just think of MySpace.

 

[excaza]

Well, I didn't have much to invest, but it was certainly worth it

 

[timhau]

Congrats! Did you get out of it already?

 

[excaza]

Got out at 120. I'm really new to the whole stocks thing and I've only got a few hundred bucks to play around with that I can afford to lose, so I'm treading lightly

 

[Almo]

I have very little knowledge about social media business, but it sounds to me like it would be one with no moat -- the top dog can change very quickly. Just think of MySpace.

You're right about top dogs changing fast. But there's a big difference between MySpace and LinkedIn: LinkedIn is good. MySpace was always bad. Facebook killed them because its design was clean, making it easy to navigate and use.

I'm not saying LinkedIn will stay king in its niche, but someone would have a lot further to go to do what Facebook did to MySpace.

 

[djpar]

It's 100% consistent with social media companies being overvalued. Morningstar puts the fair value of LinkedIn stock at $27; personally, I'd never pay even that much for it, but then again, I generally don't like paying a premium for rosy forecasts of future growth that may never happen. I have very little knowledge about social media business, but it sounds to me like it would be one with no moat -- the top dog can change very quickly. Just think of MySpace.

Gary Vaynerchuk: “99.5 Percent Of Social Media Experts Are Clowns”

Deja vu with internet companies being overvalued??

Seems human psychology is also pretty consistent.