Here Comes Another Web IPO: LinkedIn S-1 Filing Imminent
LinkedIn, the online business networking site, is likely to file regulatory documents for an initial public offering as early as today, according to sources close to the situation. — Sources said LinkedIn is ready to submit …
Context & Ripple Effects
The filing has been telegraphed for years: LinkedIn hired an ex-TiVo CFO back in 2007 as an explicit step toward an IPO, and sources said earlier this month that it planned to go public in 2011, with Morgan Stanley, Bank of America and JPMorgan reportedly slotted in as underwriters.
What makes the moment notable is the pricing benchmark already circulating: shares have been auctioning on secondary exchange SharesPost at $30 apiece, implying a near-$3 billion valuation — unconfirmed, but the number the public market will now get to argue with. CEO Jeff Weiner has spent recent months drawing a hard line between LinkedIn and Facebook ('keg stands,' in his framing), which sets up how investors will be asked to read the business.
First-order effects
- An S-1 forces LinkedIn to disclose revenue, growth and profitability figures it has kept private since founding — the first real look at whether the $30 SharesPost price holds up.
- Morgan Stanley, Bank of America and JPMorgan formally enter the deal if the rumored underwriter lineup is confirmed in the filing.
Second-order effects
- A priced LinkedIn offering gives every other large private social network a public-market comparable, tightening the valuation math for rivals still raising or staying private.
- Secondary exchanges like SharesPost get their most visible test case yet for whether pre-IPO auctions predict actual offering pricing.
Third-order effects
- If the filing opens the door for other consumer-web companies, 2011 becomes the year the post-crisis IPO window reopens for social networking — shifting these firms from venture-funded growth to quarterly-disclosure discipline.
- Sustained secondary-market activity ahead of filings pressures the SEC and bankers to formalize how late-stage private valuations translate into offer prices.
The trend: Social-networking companies are crossing from venture-backed privacy into public markets, with secondary auctions like SharesPost increasingly setting the reference price before the S-1 does.