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LNKD IPO opens huge at $83

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Re: LNKD IPO opens huge at $83

#151

Post by julianz »

smokeyj wrote: post #63
bemmu wrote: post #14

Earlier quoted context omitted.

Latest NPR Planet Money podcast episode was about bubbles, they interviewed a university professor that was running experiments on his students. They had a fake stock market with only one stock on it that would have a random dividend of either $0 or $2, so $1 on average. Students were given money to invest in the stock market. Running this experiment apparently over multiple courses, even in this small market there w…

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.

Or you could listen to the podcast and find out that it was real money, but why let facts get in the way?

Re: LNKD IPO opens huge at $83

#152

Post by brown9-2 »

jeffreymcmanus wrote: post #148
brown9-2 wrote: post #123

Earlier quoted context omitted.

Those are good points, and I'm not arguing that they left a lot of money on the table or didn't, but what I am disputing is where you said "We won't know whether the $45 price was optimal or not for a while --it may seem expensive in 90 days when the price settles down." Why does the price 90 days from now matter to the judgement of whether or not the initial sale - today's sale only - was a success? If the price dro…

The reason is because (in the absence of clairvoyance) the performance of stocks is evaluated over time. If the price is closer to $45 in a month or two, it'll be easier to say that today's price jump was an aberration. If the price is $180 in three months, it'll be possible to say that today's price is actually too low.

But we aren't discussing the long-term performance of the stock here - we are discussing the wide range between what their initial offer is, and the amount the IPO underwriters got to take home.

Re: LNKD IPO opens huge at $83

#153

Post by radicaldreamer »

dstein wrote: post #130
brosephius wrote: post #85

Earlier quoted context omitted.

what 3rd party? banks usually are the third party in these sorts of transactions.

Through an under the table deal with any hedge fund, or any number of other means, an investment bank that owns LinkedIn shares could quite easily insure their profits. That is exactly what these businesses do.

Most hedge funds use a bank as their primary broker.

Re: LNKD IPO opens huge at $83

#154

Post by akronim »

brown9-2 wrote: post #109
jeffreymcmanus wrote: post #101

Earlier quoted context omitted.

Not necessarily, since the $45 price was at the top of the range and the issue had already been repriced. We won't know whether the $45 price was optimal or not for a while -- it may seem expensive in 90 days when the price settles down.

But if the public is buying the stock at the $80 range minutes after it opens, isn't that enough to say that the initial offer was lower than what it could be? I don't think you need to know what price the stock is trading at three months from now in order to judge the initial sale value.

You're assuming that there are enough buyers at $80 to take 100% of the offered stock.

Re: LNKD IPO opens huge at $83

#155

Post by iandanforth »

jeffreymcmanus wrote: post #119
brown9-2 wrote: post #109

Earlier quoted context omitted.

But if the public is buying the stock at the $80 range minutes after it opens, isn't that enough to say that the initial offer was lower than what it could be? I don't think you need to know what price the stock is trading at three months from now in order to judge the initial sale value.

That really doesn't make any sense. As anyone who knows the stock market will tell you, if you can guess the price of a stock before the market opens, you'd be a wealthy man. But underwriters are conservative with initial IPO pricings because 1) they have no real idea where a stock will go once it's public and 2) they want the stock to go up after it opens (IPOs that don't do this are said to be "broken" and sometime…

Not even wrong.

Forget all the junk you think you know about markets. A stock is something you buy. How many things have you bought that doubled in resale price the day you bought it? I'll bet it's a vanishingly small number.

From a producers point of view such a situation means you underestimated demand for your product, which means you didn't do enough research.

In line with the common stupidity of IPOs, LinkedIn trusted a conflicted party to do that research for it.

LinkedIn paid a fear tax. Fear that if they tried to buck the statu-quo like Google they wouldn't come out as well, fear that if they tried something shockingly new like selling stocks directly to individuals who want them they would fail.*

I don't mind when people note the standard way things are done, but for the love of Bob don't pretend the way the stock market works today is fundamental, immutable, or even close to Good.

* Speed argument on this point: Illegal! -> Benefits from that? -> Ignorant investors protected! -> Uh huh, other externalities? -> Large investors make millions! -> We're done here.

Re: LNKD IPO opens huge at $83

#156

Post by nl »

blantonl wrote: post #95
antidaily wrote: post #58

Earlier quoted context omitted.

Recruiters and third parties have already signed up. Everyone uses it. That's the point.

If that is the case, then where is the revenue growth going to come from?

New market segments.

LinkedIn is incredibly successful in IT related markets, mostly in the US.

It's like when Amazon started, it was very successful selling to people involved with the internet in some professional capacity.

Re: LNKD IPO opens huge at $83

#157

Post by [deleted] »

dman wrote: post #15
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.

Might be a nice time to short, that is if there is someone willing to be on the other side of that trade.

[deleted]

Re: LNKD IPO opens huge at $83

#158

Post by icedpulleys »

dj_axl wrote: post #104
brosephius wrote: post #51

Earlier quoted context omitted.

and assuming you can find shares to short, and are willing to pay the borrow cost.

During the first 30 days after an IPO, the underwriters are not allowed to lend shares for short sale. Additionally, number of shares are limited. The entire float is not available on the first day of trading. So today, it is probably impossible to short. 30 days from now, it should be available to short. http://cash.investopedia.com/ask/answers/05/062905.asp

I've heard that larger banks and brokerages (not the underwriters) will start making shares available for shorting as early as Tuesday, which should help ease the share price down.

Re: LNKD IPO opens huge at $83

#160

Post by iamelgringo »

orijing wrote: post #140
iamelgringo wrote: post #35

There's going to be a lot more angels running around town the next few years with money to invest. Things are going to get very, very interesting. Next up, Zynga, Twitter, Facebook, Yelp, Pandora...

Pandora's already public.

LinkedIn’s IPO is viewed by many as a barometer of the public market’s appetite for Internet and social media companies, with the likes of Facebook, Groupon, Pandora and Kayak expected to IPO within the next year. Certainly, today’s huge pop in LinkedIn shares sends a signal that the market is once again hungry (if not starving) for tech.

ref: http://socialmediaobserver.wordpress.com/2011/05/20/linkedin...

Also:

Morgan Stanley, BofA Merrill Lynch, J.P. Morgan may divvy up $21 million to $24 million -- On the horizon: Facebook, Groupon, Pandora

http://www.advfn.com/nyse/StockNews.asp?stocknews=BAC&ar...

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