Linked In IPO

Lots of chatter on the LinkedIn IPO from "is this another dot com bubble?" to "is now the right time to buy?", to "how can they support an $8 Billion valuation if they plan to lose money in 2012?".

Jeff Weiner appeared on the floor of the NY Stock Exchange this morning with CNBC, and was asked all of these questions and more. He simply said... "the market will pick the value, and we're just focused on the three core business'." They have 3 lines of business including advertising revenue, recruiter services, and subscriptions for advanced services by indv users. I think the big win for LinkedIn over time will be the recruiter services, and in-house recruiting tools they're offering to business'. With recruiter fees being very expensive, many companies are seeking lower cost, efficient tools to help them staff up.

Being a bull, I feel the economy is on its way to recovery, and thus hiring will be a huge pain point for business in 2011 - 2015. LinkedIn helps to reduce this pain point, and thus will benefit from a robust economic recovery. (even a modest one).

So, if you believe that LinkedIn is a strong investment, as I do, how do you buy. Well, hindsight will be best, but my IPO experience tells me to buy during the "quiet period", which is historically 30 days following the IPO date. Shares tend to drift downward after the first day of trading, and usually land somewhere near the strike price. (in this case $45).

So, buy LNKD @ $45 per share if you like the company.

Party Like it's 1999

Two Thousand Zero Zero .... Party Like it's 1999. Wow, IPO's for LinkedIn and Facebook possible for 2011. That's a huge indicator for new investment and innovation in our social media industry. Adding to the hype, as the rumor mill churns... Groupons turned down some serious money (something like $6 Billion) from Google.
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=142495

Since we know that "fear and greed" drive our capital markets, I assume that these indicators will bring out the greed in the VC community. This means that many new entrants to the social media race will become well fortified with capital to better compete in a liquid marketplace. I'm not sure if the event will really bring back the big DOT COM boom of liquidity into emerging social media companies, but historically VC's tend to invest where liquidity exists.

The main question is which companies will be the next darlings. First it was eBay & Yahoo, bunched with everything that had Dot Com in the name, then Google emerged as the Goliath, and now? Will that be Facebook, or potentially a new entrant fueled by new VC monies.

Personally I feel that Facebook is very limited, but does offer potential growth. I think the Bing partnership is very important, and there are come deep commerce implications associated with the build out of Facebook over time. Question is... will there be a new social media platform that bumps them off the block with better tools, and a more interesting user interface.

LinkedIn is an obvious value, and will succeed for a very long time. That said, they too have been fairly limited with regards to adding new powerful tools to drive more activity and community. But hey... it's a cash cow, and will hit hard once the economy and recruiting comes back strong over the next 3-5 years.

Personally I'm very happy to see these companies thrive, and I would imagine that we'll see some very strong M&A, and more hopefully IPO action in the Dot Com and or Social Media space.

Go Bulls !!