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LNKD IPO opens huge at $83

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Re: LNKD IPO opens huge at $83

#131

Post by georgemcbay »

radicaldreamer wrote: post #102
smokeyj wrote: post #63

Earlier quoted context omitted.

People don't treat monopoly money like real money. Stunning. Next the professor should see how risk adverse these students are with their own tuition dollars. Suddenly these kids aren't the big rollers they were with imaginary risk. Quit looking at numbers, follow the risk. Numbers are relative to risk. Consider the influence of monetary policy on risk. Does a cheaper dollar make a frugal investor? Hardly.

I don't think people treat money they see on a screen or on a receipt like cash either. There's a mental disconnect.

Especially for college students... Which is why they are so heavily marketed to by credit card companies (not to mention the entire high tuition/student loan situation).

Re: LNKD IPO opens huge at $83

#132

Post by RockyMcNuts »

stevenj wrote: post #32

Two quotes: "Let's start by defining 'investing.' The definition is simple but often forgotten: Investing is laying out money now to get more money back in the future — more money in real terms, after taking inflation into account." [1] -Warren Buffett "Over the long term, it's hard for a stock to earn a much better return than the business which underlies it earns. If the business earns 6% on capital over 40 years a…

Those are really important and good points...but they're also why the two amigos don't invest in tech

- hard to predict if LinkedIn will be around and in what form in 20 or 30 years

- Munger's statement is true if the company can keep reinvesting capital at that ROE over a long time period. In fact, beyond an inflection point, a company like Microsoft or LinkedIn can become a natural monopoly and increase revenues and profits a lot with relatively little capital - there are actually INCREASING returns to scale. Which is what LNKD investors are apparently betting on.

Tech investing is more about the Next Big Thing, who is the next Microsoft or Google, and less about is there some moat that lets them earn 18% on capital and keep reinvesting the capital over a long period, which is where Buffett is a master.

Re: LNKD IPO opens huge at $83

#133

Post by joeburke »

blantonl wrote: post #5

LinkedIn made $15 million dollars last year, and they just raised $660 million dollars out of the gate in this IPO. And, this IPO values LinkedIn at somewhere close to 6.5 billion dollars. A valuation of 6.5 billion dollars on $15 million net income. Let that sink in.

It means there's a huge potential for that income and revenue to grow.

Re: LNKD IPO opens huge at $83

#134

Post by run4yourlives »

nikcub wrote: post #120
run4yourlives wrote: post #112

Earlier quoted context omitted.

The demand however is based on "expert analysis" that suggests that LinkedIn is worth 4 billion dollars. I don't have an issue with demand setting the price; I have an issue with that demand being justified by linking it back to the potential performance of the company in such a way that anyone with half a brain can seen is bordering on the ludicrous. If the problem was limited to investors that were prepared to take…

You know what is ludicrous? That LinkedIn is on for $400M this year and has doubled its revenue each of the past 3 years That is ludicrous

It's also unsustainable. LinkedIn will never be worth however many billions of dollars it's valued at right now without a healthy does of speculation and fad-type demand.

They only made $15 MM last year. That's a perfectly acceptable profit and a well run company, but it is not billions of dollars.

Re: LNKD IPO opens huge at $83

#138

Post by crizCraig »

brosephius wrote: post #73
dstein wrote: post #68

Earlier quoted context omitted.

That would prevent insiders and common shareholders from selling their shares, but it would in no way prevent an investment bank from unloading their shares through some sort of intermediary.

you mean the underwriters of the IPO are not subject to a lockup period? that seems unusual, but I'd believe it I guess.

From the S1 filling (http://www.sec.gov/Archives/edgar/data/1271024/0001193125110...):

Morgan Stanley & Co. Incorporated may, in its sole discretion, release all or some portion of the shares subject to lock-up agreements prior to expiration of the lock-up period.

Related poll: http://www.wepolls.com/r/462580/Is-it-right-for-Wall-Street-...

Re: LNKD IPO opens huge at $83

#139

Post by shn »

rbranson wrote: post #111
[deleted] wrote: post #107

Earlier quoted context omitted.

[deleted]

The price is set based on market analysis. That's what the company thought they could get for it. The transaction requires willing participants.

Think about the market price of houses before the crash, each buyer and the seller were willing to make transaction. We all know the result. Fundamentals are important as well as prospect of the company. So we should talk about what is that prospect that can make company's current market valuation rational.
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