Upcoming IPO from SocialNetwork Giant LinkedIn

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LinkedIn
LinkedIn

LinkedIn – the social networking site for business professionals – is reportedly considering a stock offering within the first quarter of 2011.  LinkedIn revealed that its “proposed maximum aggregate offering price” — the amount it is hoping to raise — is $175 million.

Morgan Stanley & Co. will be the lead underwriter for the IPO.  It will be joined by Merrill Lynch, Allen & Company and UBS Securities.

LinkedIn decided not to disclose the target price for its IPO or the date, though it will almost certainly occur before the end of 2011. According to SharesPost, a secondary market for trading shares in private companies, LinkedIn is worth $2.51 billion. That number will likely rise as the IPO approaches.

For the first time, we have a clear insight into LinkedIn’s financial health, and overall it is strong.  The company was able to double its 2009 revenues to $161.4 million in the first nine months of 2010, led by increased revenue from advertising and job listings.

We also came to know that 2010 is the first year LinkedIn was profitable.  For more information check their Financial Numbers:

■ Net revenue, Jan-Sept 2010: $161.4 million
■ Net revenue, 2009: $80.8 million
■ Total expenses, Jan-Sept 2010: $148.9 million
■ Total expenses, 2009: $84.1 million
■ Net income (after tax), Jan-Sept 2010: $10.1 million
■ Net income (after tax), 2009: -$3.4 million
■ Cash on hand (as of Sept 30, 2010): $89.6 million
■ Total assets (as of Sept 30, 2010): $197 million

In addition, LinkedIn revealed its revenue breakdown through their IPO paperwork . From January 2010 to September 2010, LinkedIn earned $161.4 million in revenue from three products: hiring solutions (job listings), marketing solutions (advertising) and premium subscriptions.

Here is the Revenue sources:

■ Job listings, Jan-Sept 2010: $65.9 million (41% of revenue)
■ Job listings, 2009: $23.75 million (29% of revenue)
■ Advertising, Jan-Sept 2010:$51.37 million (32% of revenue)
■ Advertising, 2009: $23.8 million (30% of revenue)
■ Premium subscriptions, Jan-Sept 2010: $44.1 million (27% of revenue)
■ Premium subscriptions, 2009: $33.2 million (41% of revenue)

LinkedIn announced that it gains a new member every second and now has more than 90 million total members worldwide, 40 million in the U.S. and 50 million internationally. That is up from the 55.1 million members it had in 2009.

The following is a list of existing LinkedIn shareholders with more than a 1% stake in the company:

■ Reid Hoffman and Michelle Yee: 19,066,032 shares, equivalent to 21.4% ownership.
■ Sequoia Capital: 16,840,309 shares, equivalent to 18.9% ownership.
■ Greylock Partners: 14,047,978 shares, equivalent to 15.8% ownership.
■ Bessemer Venture Partners: 4,578,253 shares, equivalent to 5.1% ownership.
■ Jeffrey Winer, CEO: 3,844,512 shares, equivalent to 4.1% ownership.
■ Steven Sordello, CFO: 1,007,327 shares, equivalent to 1.1% ownership.
■ Dipchand “Deep” Nishar, VP Product & User Experience 970,000 shares, equivalent to 1.1% ownership.

Reid Hoffman, the founder and chairman, owns the largest share of the company (along with his wife) at 21.4%. The three next biggest shareholders are venture capital firms Sequoia Capital, Greylock Partners and Bessemer Venture Partners. Together, they own approximately 39% of the company.

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