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.
SharesPost has contacted LinkedIn shareholders to gauge interest, said two of the people, who declined to be identified because the auction isn’t public. Sellers had until this week to commit to SharesPost, and participants will be informed of results on Jan. 28, according to a document obtained by Bloomberg.
The sale would give LinkedIn investors a chance to divest shares before the company files for an initial public offering. LinkedIn has hired banks including Morgan Stanley & JPMorgan Chase & Co. to advise on an IPO and may complete its prospectus this quarter, a person familiar with the plans said this month. SharesPost’s website now values LinkedIn at $2.51 billion.
LinkedIn has 97.1 million shares outstanding, according to SharesPost. At $30 a share, investors would be valuing the Mountain View, California-based company at $2.91 billion. A minimum of 95,500 shares will be sold and buyers must invest at least $100,000 to be eligible.
LinkedIn, based in Mountain View, California, has more than 1,000 employees and 90 million users in more than 200 countries. Members use the site to search for jobs, recruit employees and find industry experts. The company allows users to create and maintain profiles for free and makes money through a premium service and from advertising.
Hani Durzy, a spokesman for LinkedIn, declined to comment.
Surge in Trading
A surge in secondary-market trading helped push up the valuations of LinkedIn, Facebook Inc., Twitter Inc. and other top venture-backed Web startups by a combined 54 percent between June and December, according to Nyppex LLC.
“We cannot comment on any prospective or current offerings,” SharesPost Chief Executive Officer Dave Weir said in a statement. “We would be happy to discuss the results of any future auctions if and when we have them once they are completed.”
As more investors clamor for stakes in private companies, regulators are stepping up scrutiny. SecondMarket Inc., a SharesPost competitor, said this month that it received a request for information from the U.S. Securities and Exchange Commission. The SEC is seeking information about trading in companies including LinkedIn and Facebook, the Wall Street Journal and New York Times reported last month.
SharesPost, founded in 2009, is an online marketplace that connects more than 45,000 investors with private-company securities, according to its site. In March, San Bruno, California-based SharesPost introduced a venture-backed index that tracks the value of seven companies based on recent transactions, bid and offer prices, research reports and venture financing.
LinkedIn is the fourth-biggest company by market value on SharesPost’s index. Facebook is the biggest with a $76 billion valuation, followed by Zynga Game Network Inc. and Twitter.