LinkedIn Plans $1 Billion Share Sale After Stock Surge

LinkedIn Corp. (LNKD), the world’s biggest professional-networking website, filed to raise about $1 billion in a stock sale after a fivefold surge in its shares since its initial public offering in 2011.

The company plans to sell 4.17 million shares of its Class A stock, according to a filing yesterday with the U.S. Securities and Exchange Commission. While the price hasn’t been determined, LinkedIn estimated it will raise $1 billion based on a closing stock price of $240.04 on Aug. 30.

LinkedIn shares, which debuted at $45 in May 2011, have soared in the more than two years since as the company doubled its user base, added features to keep members on the site for longer and increased subscription prices for recruiters. The offering is more than twice the size of LinkedIn’s IPO, even as the company is selling fewer than half the number of shares.

LinkedIn fell as much as 4.3 percent to $235.50 in extended trading following the announcement, after closing at $246.13 at 4 p.m. in New York. Selling new shares dilutes the stakes of existing equity holders.

The Mountain View, California-based company last raised money in November 2011 in a $701.5 million offering. As in that sale, LinkedIn said the cash will be used for working capital, product development and possibly to make strategic acquisitions or investments.

At the end of the second quarter, LinkedIn had $873 million in cash, cash equivalents and short-term investments with no debt.

Julie Inouye, a spokeswoman for LinkedIn, didn’t respond to a request for comment.

JPMorgan Chase & Co. (JPM), Morgan Stanley, Goldman Sachs Group Inc., Bank of America Corp. and Allen & Co. are managing the offering.

To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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