LinkedIn Said to Be Worth Almost $3 Billion in Secondary Sale
LinkedIn Corp. shares are being sold in an auction by secondary exchange SharesPost Inc. for $30 apiece, valuing the professional-networking website at almost $3 billion, according to three people familiar with the matter.
Context & Ripple Effects
Six months after Tiger Global invested in LinkedIn at a $2 billion valuation, shares in the company are being auctioned on SharesPost at $30 apiece — an implied mark of almost $3 billion, according to three people familiar with the matter. The figure is sourced through an unconfirmed secondary-market transaction, not a company filing, so it reflects what private buyers will pay rather than anything LinkedIn has declared.
The sale matters because LinkedIn is still private: SharesPost is functioning as a de facto price-discovery venue for a stock that has no public market yet, and each successful auction ratchets the reference price for every holder.
First-order effects
- Current LinkedIn shareholders — including employees holding vested options — get a concrete liquidity route before any listing, with the $30 clearing price setting a benchmark for their holdings.
- LinkedIn's implied valuation moves up roughly half again from the $2 billion Tiger Global paid in mid-2010, repricing the company on private-market terms alone.
Second-order effects
- Secondary exchanges like SharesPost build a track record and fee base from auctions like this, encouraging more pre-IPO holders at other venture-backed companies to test bids.
- A rising private-market price pressures LinkedIn's board toward a listing: every dollar of value captured by secondary traders is a dollar existing shareholders leave on the table while the company stays private.
Third-order effects
- If secondary venues keep supplying liquidity, late-stage financing shifts structurally: private valuations become continuously quoted rather than set episodically by lead investors, and the IPO turns into a follow-on event priced against an established private market.
- That dynamic pushes regulators and exchanges toward rules governing who may trade pre-IPO stock, since employee share sales and investor exits would increasingly bypass traditional underwritten offerings.
The trend: Pre-IPO companies are acquiring public-style price discovery through secondary exchanges, converting insider conviction into liquidity long before a listing.