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SlideShare acquired by LinkedIn

blog.slideshare.net

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Re: SlideShare acquired by LinkedIn

#31

Post by [deleted] »

jcampbell1 wrote: post #23
debacle wrote: post #15

I just looked at LinkedIn's P/E. It's almost a thousand. How is anyone valuating the company in such a way that could even assume they would increase their revenues 50 times over in the next few years?

P/E is market cap divided by profits. Your comment about increasing revenues by 50x is non-sensical. Consider a company with $100M in revenue, $1M in profit, and a market cap of $1B. PE is 1000. Now say this company has a shot at doubling revenue in the next few years without incurring additional cost. They will then have $200M in revenue, $101M in profit, and the PE will be 10. Just looking at P/E in isolation is li…

[deleted]

Re: SlideShare acquired by LinkedIn

#32

Post by gordonbowman »

brudgers wrote: post #24
ChuckMcM wrote: post #5

Earlier quoted context omitted.

The good news is that since the employees owned some we can be sure that they saw some of that 119M$. That being said their site died :-) [1] Random note: It seems to me that that KK would be the appropriate unit for millions (thousand-thousands) and MM would be Million Millions or (10^12, or trillions.

If you do the math, very few employees will retire. FU money @ $7 million requires about 6% ownership. And that's assuming their wasn't a high multiple liquidation preference for any of the investors. [Investors here: http://www.slideshare.net/about/investors ] That's not to say a couple of hundred thousand dollars for being an employee isn't bad. But the chef isn't going to become a millionaire.

Keep in mind the upside of LNKD stock. Still probably not enough to retire for most but the upside is substantial.

Re: SlideShare acquired by LinkedIn

#33

Post by fennecfoxen »

gordonbowman wrote: post #32
brudgers wrote: post #24

Earlier quoted context omitted.

If you do the math, very few employees will retire. FU money @ $7 million requires about 6% ownership. And that's assuming their wasn't a high multiple liquidation preference for any of the investors. [Investors here: http://www.slideshare.net/about/investors ] That's not to say a couple of hundred thousand dollars for being an employee isn't bad. But the chef isn't going to become a millionaire.

Keep in mind the upside of LNKD stock. Still probably not enough to retire for most but the upside is substantial.

The upside potential of LNKD? Depends who you ask.

http://caps.fool.com/Ticker/LNKD.aspx

856 'Underperform' to 196 'Outperform'? Sounds like somebody is bearish! (disclaimer: as i'm sure is quite obvious the Motley Fool community KNOWS EVERYTHING and is NEVER WRONG. coughcough)

Re: SlideShare acquired by LinkedIn

#35

Post by blantonl »

jcampbell1 wrote: post #23
debacle wrote: post #15

I just looked at LinkedIn's P/E. It's almost a thousand. How is anyone valuating the company in such a way that could even assume they would increase their revenues 50 times over in the next few years?

P/E is market cap divided by profits. Your comment about increasing revenues by 50x is non-sensical. Consider a company with $100M in revenue, $1M in profit, and a market cap of $1B. PE is 1000. Now say this company has a shot at doubling revenue in the next few years without incurring additional cost. They will then have $200M in revenue, $101M in profit, and the PE will be 10. Just looking at P/E in isolation is li…

Consider a company with $100M in revenue, $1M in profit, and a market cap of $1B. PE is 1000. Now say this company has a shot at doubling revenue in the next few years without incurring additional cost. They will then have $200M in revenue, $101M in profit, and the PE will be 10.

Can someone provide a concrete example of a company that has doubled revenue in a few years without incurring additional cost? I realize that it is possible, but I'd love to see where this has actually occurred.

Re: SlideShare acquired by LinkedIn

#36

Post by nikcub »

brudgers wrote: post #24
ChuckMcM wrote: post #5

Earlier quoted context omitted.

The good news is that since the employees owned some we can be sure that they saw some of that 119M$. That being said their site died :-) [1] Random note: It seems to me that that KK would be the appropriate unit for millions (thousand-thousands) and MM would be Million Millions or (10^12, or trillions.

If you do the math, very few employees will retire. FU money @ $7 million requires about 6% ownership. And that's assuming their wasn't a high multiple liquidation preference for any of the investors. [Investors here: http://www.slideshare.net/about/investors ] That's not to say a couple of hundred thousand dollars for being an employee isn't bad. But the chef isn't going to become a millionaire.

this would have cleared any liquidity hurdles, easily. it is a kick-ass outcome for the founders. the investors probably got 10x over 4 years.

Re: SlideShare acquired by LinkedIn

#37

Post by blantonl »

rdl wrote: post #28
debacle wrote: post #15

I just looked at LinkedIn's P/E. It's almost a thousand. How is anyone valuating the company in such a way that could even assume they would increase their revenues 50 times over in the next few years?

I fell for the same thing myself a while ago; the rules actually are different when you're selling something with zero marginal cost. As long as you believe LinkedIn can increase their revenue without adding to costs, their current P/E is kind of irrelevant. This is why investors basically hate consulting companies (since revenue/earnings scale linearly -- in some ways, sub-linearly, since you have to hire more layer…

the rules actually are different when you're selling something with zero marginal cost.

I don't think there is any business that sells something with zero marginal cost. Even if LinkedIn grows significantly without any marketing and sales activities, they still must deal with:

More users == more servers More users == more support staff and on and on.

Use Google and Facebook as classic examples.

And if you aren't getting more users, then you are ramping up marketing efforts to do so.

While LinkedIn is a definite success story, I'm not buying it that they are running a zero marginal cost business. I don't believe that anyone is.

Re: SlideShare acquired by LinkedIn

#38

Post by justincormack »

tylerrooney wrote: post #9

I don't know what the cash/stock split was, but it's worth mentioning the LinkedIn's IPO raised $352M* so buying SlideShare was just under 34% of all the money they raised. * http://www.bloomberg.com/news/2011-05-18/linkedin-raises-352...

They would never have paid that much of their cash. As others have mentioned they have much more cash than that, plus some was shares.

Re: SlideShare acquired by LinkedIn

#39

Post by ry0ohki »

sjtgraham wrote: post #7
ChuckMcM wrote: post #5

Earlier quoted context omitted.

The good news is that since the employees owned some we can be sure that they saw some of that 119M$. That being said their site died :-) [1] Random note: It seems to me that that KK would be the appropriate unit for millions (thousand-thousands) and MM would be Million Millions or (10^12, or trillions.

Mille, i.e. Latin for a thousand. Thus MM = 1000 x 1000 = 1,000,000. I rarely see MM used to denote a million outside the financial world. I have never seen a job, for example listing remuneration as "circa 120M" meaning 120,000

Thanks, I've always wondered why people used MM, it made no sense to me.
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