Almost $100/user, not even including active users... that is insanity.
Imagine a Facebook IPO that reached $100 per user...
LNKD IPO opens huge at $83
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Re: LNKD IPO opens huge at $83
#32Two 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 and you hold it for that 40 years, you're not going to make much different than a 6% return — even if you originally buy it at a huge discount. Conversely, if a business earns 18% on capital over 20 or 30 years, even if you pay an expensive looking price, you'll end up with a fine result." [2]
-Charlie Munger
- - -
[1] http://money.cnn.com/magazines/fortune/fortune_archive/1999/...
Re: LNKD IPO opens huge at $83
#33[deleted]
Re: LNKD IPO opens huge at $83
#34Almost $100/user, not even including active users... that is insanity.
Why? What does that have to do with anything? So lets assume I enter into linked in the fact that I have a 100 professional people who won't spit on my name, my employment history and some recommendation blurbs. How much is that worth to a hiring manager screening employees? Out of 20 candidates for a job its not worth much, but if they want to extend an offer its worth something. Also assume job switching every 2 years. So every couple of years some sucker would be willing to pay for that information. The thing I find funny is that the upgraded accounts that linked in flogs are violating your privacy for extra money. Can I check a "Not linked in's bitch" check mark?
Re: LNKD IPO opens huge at $83
#35There'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...
Re: LNKD IPO opens huge at $83
#36LinkedIn 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.
Based on there IPO prospectus from sec.gov: Year; Revenue; Costs; Income 2008; 78,773; 84,282; (4,522) 2009; 120,127; 123,482; (3,973) 2010; 243,099; 223,523; 15,385 expense growth is 46%, 82% yoy. revenue growth is 52%, 103% yoy. So, you have a company that is growing revenue faster than expenses, has 100% year over year revenue growth, and has just hit the inflection point to be profitable... and you want to place…
Exactly.
If LinkedIn can make $243M/year selling to recruiters and job seekers in a recession, what do you think happens when we have a global recovery and the inevitable hiring boom comes?
Re: LNKD IPO opens huge at $83
#37Earlier quoted context omitted.
Based on there IPO prospectus from sec.gov: Year; Revenue; Costs; Income 2008; 78,773; 84,282; (4,522) 2009; 120,127; 123,482; (3,973) 2010; 243,099; 223,523; 15,385 expense growth is 46%, 82% yoy. revenue growth is 52%, 103% yoy. So, you have a company that is growing revenue faster than expenses, has 100% year over year revenue growth, and has just hit the inflection point to be profitable... and you want to place…
Exactly. If LinkedIn can make $243M/year selling to recruiters and job seekers in a recession, what do you think happens when we have a global recovery and the inevitable hiring boom comes?
I'll tell you what happens. Recruiters and third parties sign up in droves for the sole purpose to spam the userbase, which ultimately drives members away from the site.
LinkedIn earned their 100 million users by providing a professional networking platform where the users could choose who they network with. When the userbase has less of a choice regarding who contacts them, they'll abandon linkedIn as fast as a teenager terminating his MySpace account.
Re: LNKD IPO opens huge at $83
#38Earlier quoted context omitted.
Based on there IPO prospectus from sec.gov: Year; Revenue; Costs; Income 2008; 78,773; 84,282; (4,522) 2009; 120,127; 123,482; (3,973) 2010; 243,099; 223,523; 15,385 expense growth is 46%, 82% yoy. revenue growth is 52%, 103% yoy. So, you have a company that is growing revenue faster than expenses, has 100% year over year revenue growth, and has just hit the inflection point to be profitable... and you want to place…
Exactly. If LinkedIn can make $243M/year selling to recruiters and job seekers in a recession, what do you think happens when we have a global recovery and the inevitable hiring boom comes?
Might LinkedIn's business be counter-cyclical?
People are going to be 'networking' most intensely when they don't have a job or are worried about their current job. If there are fewer people looking for a job and those people get pulled out of the market more quickly, there's less money to be made from them.
Re: LNKD IPO opens huge at $83
#39Suppose there is a tech/social web bubble, is there anything anyone would advise for starting your own startups? E.g: stick with the day job; bootstrap rather than take money; postpone and launch in 2 years; get in fast while the hype is still there? Any startup survivors from the last one wish they'd done things differently?
It's mainly the investors that lose out from a bubble bursting--one way to look at it is that a bubble is just a good time to get a high valuation from a company's perspective. By calling it a bubble, you're saying you think there's more money out there looking for startups to invest in than startups whose prospects can support that valuation. That's a good time to get OPM (other people's money) and spend it on whatever your dream idea is, if you think you've got a shot at making it work.
There are of course counterarguments: - Other startups are getting too much money at the same time you are, and probably spending it in irrational ways that may make it harder for you to be profitable, such as overpaying on advertising and hiring. The same argument can support the idea that the best time to start a startup is during a recession, when the big companies aren't investing enough money in growth. - When the bubble bursts, there will be far more startups looking for money than money looking to be invested, so you're more likely to have to throw in the towel after bursting.
On the balance, I agree with the advice of most experienced entrepreneurs I've heard--err on the side of worrying more about yourself, your idea, and how you'll execute, and less about the economic environment at the time.
Re: LNKD IPO opens huge at $83
#40The IPO should have probably been priced a little higher. Closer to $70 or $80, given this type of demand. The people that were in on the IPO got a very nice return this morning, provided the stock price stays this high for a little while. Also, LinkedIn would have raised something closer to $700 million or more, had the IPO been priced more accurately. Does anyone know who the underwriters were?