Wednesday, May 18, 2011

LinkedIn Prices IPO At $32 To $35 Per Share; Expects $146.6M In Net Proceeds From Offering

After disclosing its intention to list its IPO on the New York Stock Exchange under the symbol LNKD, LinkedIn has released a new filing with the SEC that shows that it is pricing its IPO between $32.00 and $35.00 per share. LinkedIn filed its initial S-1 in January, with the total offering amount of $175 million.

LinkedIn is offering 7,840,000 shares in its IPO, offering 4,827,804 shares of its Class A common stock and the selling stockholders are offering 3,012,196 shares of Class A common stock. There are currently 94,498,627 shares outstanding.

The company expects proceeds from the sale of the shares of stock in the offering will be approximately $146.6 million (in total the company will be raising $274 million but some of this money goes to fees etc.). LinkedIn says it will use these funds from the offering for general corporate purposes, including working capital, sales and marketing activities, general and administrative matters and capital expenditures. The funds could also be used for acquisitions investments in complimentary technologies. Currently LinkedIn has no commitments or agreements to enter into any acquisitions or investments. LinkedIn adds that based on its current financial position, it will not need to use the funds raised from the offering in the next year.

As we wrote in January, Chairman and co-founder Reid Hoffman is LinkedIn’s largest shareholder, owning 21.4 percent of the company. Sequoia Capital and Greylock are the second and third largest shareholders.

LinkedIn’s IPO should debut on the NYSE fairly soon and it will be interesting to see how the Street reacts to the offering. One factor to consider is that LinkedIn is growing revenue—the company just reported that Q1 revenue in 2011 was up 110 percent to $93.9 million. Net income increased to $2.08 million, from $1.81 million in Q1 2010. The increase in sales came from the company’s hiring solutions, a paid offering which helps recruiters search for professionals and list jobs on the site.

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