LinkedIn Boosts IPO Size, Valuing Networking Site at More Than $3 Billion
LinkedIn Corp. increased its planned initial public offering, valuing the largest professional social-networking website at more than $3 billion.
The company now plans to sell as much as $315.6 million of shares to expand the business, according to regulatory filing today. In January, the Mountain View, California-based company said it planned to raise as much as $175 million through an IPO.
LinkedIn is the first of a series of high-profile U.S. Web companies that may sell shares to the public as technology valuations soar. Online coupon provider Groupon Inc. is discussing an IPO that would value it at as much as $25 billion, people familiar with the discussions said this year.
LinkedIn said today it is setting the IPO to include 7.84 million Class A shares at a price of $32 to $35 each, with a so- called overallotment option to sell another 1.18 million shares. The company also has Class B shares, which have ten times the voting power of Class A shares and will represent 99.1 percent of votes after the offering.
LinkedIn said it plans to use the proceeds to fund existing operations and expand the business, which may include buying other companies or technologies. The company will have 94.5 million shares outstanding after the offering, giving the company a value of more than $3 billion at the $32 price.
In January, the company’s shares were being sold in an auction by secondary exchange SharesPost Inc. for $30 apiece, valuing the site at almost $3 billion, people familiar with the matter said.
LinkedIn had more than 1,000 employees and 90 million users in more than 200 countries at the end of last year. Palo Alto, California-based Facebook Inc., the most popular social network, has more than 500 million users.
LinkedIn members use the site to search for jobs, recruit employees and find industry experts. While users can create personal profiles for free, the company introduced paid subscriptions in 2005, giving recruiters more access to job candidates and providing business professionals ways to communicate with one another. The company also makes money by selling ads on the site.
Sales at LinkedIn more than doubled to $243 million last year. Net income was $15.4 million, with $3.43 million attributable to common shareholders. Sales in the first quarter of 2011 more than doubled to $93.9 million.
Its biggest shareholders include co-founder Reid Hoffman and his family and trust, with 21.7 percent of the voting power after offering; Sequoia Capital, with 19.3 percent; Greylock Partners, with 16.1 percent; and Bessemer Venture Partners, with 5.2 percent. LinkedIn Chief Executive Officer Jeff Weiner has 2.5 percent.
In addition to members of LinkedIn’s management team, other investors selling shares include Goldman Sachs Group Inc. (GS), Bain Capital LLC, and The McGraw-Hill Cos Inc.