LinkedIn, a US-based social network for business professionals, has seen a 109% rise in its share price during the first day of trading after its flotation even after pricing at the top of its revised range.
LinkedIn’s shares closed at $94.25 each after the initial public offering of $45 per share and more than doubling its market capitalization to $8.9bn. This is more than 30 times LinkedIn’s $243m in revenues last year, from which it showed net income of $15m.
Investment banks led by Morgan Stanley, BoA Merrill Lynch and JP Morgan earned $24.7m from the flotation at its $45 per share issue price, and placed a further 1.18 million shares as demand was so strong, according to LinkedIn’s regualtory filing. The flotation price range had been increased to between $42 and $45 per share from $32 to $35 per share.
LinkedIn raised $202m by selling 4.8 million shares while shareholders sold three million to raise $126m. The selling shareholders included publisher McGraw Hill and investment bank Goldman Sachs.