LinkedIn, not Facebook, became social IPO star

May 27, 2013 by Benjamin Pimentel

Facebook Inc. isn't the only social media company marking the anniversary of its public trading debut this week.

Corp. will celebrate the second anniversary of its on Sunday, a day after marks its first birthday as a public company.

In LinkedIn's case, "celebrate" is the appropriate word.

"LinkedIn has been the belle of the social IPO ball," analyst Roger Kay of Endpoint Technologies Associates told MarketWatch.

While it didn't attract the pop culture frenzy that Facebook enjoyed, the LinkedIn IPO will be remembered as one of the most successful trading debuts in history.

LinkedIn shares closed Friday at $182.35 a share, roughly four times their IPO price of $45. When it debuted on May 19, 2011, the stock more than doubled to close at $94.25. On the other hand, Facebook ended its debut trading day with a gain of 23 cents.

LinkedIn's debut was supposed be just the first wave of social media IPOs that was expected to reach a high point with Facebook.

LinkedIn didn't just have a far more successful trading debut; it has maintained a solid momentum.

LinkedIn has more than 225 million members, much smaller than Facebook's more than a billion users. But LinkedIn isn't just a social network. The Mountain View, Calif.-based company also offers hiring and marketing services to businesses, and those have become part of LinkedIn's central strengths.

"LinkedIn has tapped into a core set of jobs that professionals want to get done around managing your professional network, looking for a new job, refining your skills," IDC analyst Crawford Del Prete told MarketWatch. "They kind of disrupted the Rolodex."

LinkedIn also evolved steadily into a "rich professional content site," Del Prete added, referring to how LinkedIn has served as a forum for professionals on a range of issues.

Being focused on professionals and businesses gave LinkedIn a big advantage over Facebook, said Tim Bajarin of Creative Strategies Inc.

With consumer-focused companies, "the investment community tends to be more fickle," he told MarketWatch. With companies geared to businesses, he added, "it's easier to see the monetization level."

In a Tuesday note initiating coverage, Baird analyst Mark Marcon said, "As the world's largest professional network, LinkedIn has become the 'must have' solution for companies seeking talent everywhere, leading to rapid share gains against both online and offline alternatives."

LinkedIn did hit a bump recently, after posting a disappointing outlook. The stock has shed about 6 percent this month, although it's still up more than 58 percent year-to-date.

The consensus view has been that investor enthusiasm got a tad overheated. In fact, Marcon of Baird started the stock at neutral.

"Truly outstanding business model is highly scalable, generating high incremental margins and strong free cash flow," he wrote.

The company has a "remarkable growth trajectory" that is "discounted by equally lofty valuation, he added.

Explore further: LinkedIn spruces up mobile app to widen appeal

5 /5 (2 votes)
add to favorites email to friend print save as pdf

Related Stories

Career-focused LinkedIn tops 200 mn members

Jan 09, 2013

LinkedIn on Wednesday announced that more than 200 million people have joined the career-focused online social network since its launch nearly a decade ago.

LinkedIn's IPO priced at $45 a share

May 18, 2011

(AP) -- LinkedIn priced its IPO at $45 per share to set up the first stock market debut among a fraternity of Internet networking services that's captivating investors.

LinkedIn results give relief to social media

Aug 02, 2012

The professional social media group LinkedIn reported better-than-expected results Thursday, giving some relief to a sector battered by disappointments from Facebook and others.

Recommended for you

Yahoo sees signs of growth in 'core' (Update)

8 hours ago

Yahoo reported a stronger-than-expected first-quarter profit Tuesday, results hailed by chief executive Marissa Mayer as showing growth in the Web giant's "core" business.

Intel reports lower 1Q net income, higher revenue

9 hours ago

Intel's earnings fell in the first three months of the year amid a continued slump in the worldwide PC market, but revenue grew slightly because of solid demand for tablet processors and its data center services.

Twitter buys data analytics partner Gnip

12 hours ago

Twitter says it has bought its data partner Gnip, which provides analysis of the more than 500 million tweets its users share each day—to advertisers, academic institutions, politicians and other customers.

Zebra to spend $3.45B on Motorola business

16 hours ago

Zebra Technologies is spending more than $3 billion to buy the enterprise business of Motorola Solutions in a considerable expansion that is both technological and geographical.

Relativity's last-minute bid for Maker rebuffed

21 hours ago

Relativity Media, a film financier and movie distributor, was rebuffed in a last-minute bid for Maker Studios, the YouTube video creator that had agreed to be bought by The Walt Disney Co. last month.

User comments : 0

More news stories

Intel reports lower 1Q net income, higher revenue

Intel's earnings fell in the first three months of the year amid a continued slump in the worldwide PC market, but revenue grew slightly because of solid demand for tablet processors and its data center services.

Low Vitamin D may not be a culprit in menopause symptoms

A new study from the Women's Health Initiative (WHI) shows no significant connection between vitamin D levels and menopause symptoms. The study was published online today in Menopause, the journal of The North American Menopa ...

Astronomers: 'Tilt-a-worlds' could harbor life

A fluctuating tilt in a planet's orbit does not preclude the possibility of life, according to new research by astronomers at the University of Washington, Utah's Weber State University and NASA. In fact, ...