After IPO, LinkedIn Value May Top $4 Billion

LinkedIn Corp., the largest professional-networking website, increased the price range for its initial public offering, lifting the company’s potential valuation to as much as $4.25 billion.
The company is offering 7.84 million shares at $42 to $45 each, according to a

At the new top end of the range, LinkedIn would raise $405.7 million,
 about 29 percent more than previously sought.

filing with the U.S. Securities and Exchange Commission today. The shares had been offered for $32 to $35 apiece. At the top end of the new range, Mountain View, California-based LinkedIn would raise $405.7 million if underwriters exercise an overallotment option to buy 1.18 million additional shares.
LinkedIn is the first major U.S. social-networking company to tap the public market for funding and may be the first in a wave of IPOs by other Internet companies. Groupon Inc., the deals website that rebuffed a $6 billion takeover approach from Google Inc., is considering a public offering. Facebook Inc. may pursue an IPO in 2012, three people familiar with the matter said last year.
Morgan Stanley (MS), Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) are leading the offering. The stock will trade under the symbol LNKD.
About 62 percent of the shares in the offering are being sold by LinkedIn, which said it plans to use the proceeds to fund existing operations and to expand the business, possibly including buying other companies or technologies.

LinkedIn Sellers

The sellers of the other shares include a venture capital affiliate of Bain Capital LLC, McGraw-Hill Cos., Goldman Sachs Group Inc. (GS) and founder and Chairman Reid Hoffman, the prospectus shows. Venture capital backers Sequoia Capital, Greylock Partners and Bessemer Venture Partners aren’t selling shares, according to the filing.
LinkedIn members use the site to search for jobs, recruit employees and find industry experts. While users can create personal profiles for free, the company introduced paid subscriptions in 2005, giving recruiters more access to job candidates and providing business professionals ways to communicate with one another. The company also makes money by selling ads on the site.
The new midpoint price of $43.50 would value LinkedIn at $4.11 billion, or about 11 times estimated sales of $376 million this year, if sales for the year continue at the $93.9 million rate of the first quarter.