LinkedIn Value at Closing: $9 Billion

Wall Street investors who spent the day bidding up LinkedIn faster than the last seconds of a hot eBay auction have given the company a $9 billion value as of the end of the trading day in New York.

Not bad for a job board business network that saw its first profit last year.

The stock, which was priced in its first filings with the Security and Exchange Commission at $32-$35, soared to $122.70, before settling back to close the day at $94.25 a share.

Trading as LNKD, the stock was the darling of Wall Street. More than 27 million shares will have changed hands by the time the market closes, several times the 7.84 million share that were part of the initial public offering. More than 200 stories have appeared in the financial trades and online since the stock opened this morning.

The Wall Street Journal wrote an entertaining post pointing out that at LinkedIn’s price at one point, Apple would be worth $3 trillion. It shows, says the Journal, “how bananas the LinkedIn IPO is.”

In a more appropriate comparison, at its current price LinkedIn is worth about five times what Monster is. Monster’s stock closed today at $15.01.

The difference, of course, is that Monster Worldwide has been around for 16 years or so (depending on whether you consider just the job board or its predecessor, TMP). The other difference is that Monster’s quarterly sales are equal to LinkedIn’s annual sales.

The big difference is that LinkedIn is new school. It was designed as a business networking site and since has seen recruitment become the biggest part of its revenue stream. Now, recruiters pay annual fees to access tools to search for candidates and to contact them directly. Job postings, a relatively new product, is growing.

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It’s the social aspect of the site that makes it different from job boards, despite its reliance on recruitment for revenue and profits. Users come to the site to make business connections, participate with peers in professional conversations, and stay atop developments. Job search, if they come for that at all, is down the list.

That’s why recruiters are so taken with LinkedIn; the users are almost all passives.

Job boards, try as hard as they may to layer on social and career elements, are still for job hunting. By definition, then, nearly everyone on the site is an active job seeker.

Still, while the IPO has made new Silicon Valley billionaires and millionaires, the Journal offers three issues to consider. First on the list is “Yes, this is crazy.” At the bottom of the article is a little poll: “Does LinkedIn’s successful IPO signal a new tech bubble? So far, the Yes votes have 70 percent of the total.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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7 Comments on “LinkedIn Value at Closing: $9 Billion

  1. Congratulations to all the investors in LinkedIn!

    Congratulations also goes out to all the employers who believed in, and funded, the early adoption of the model.

    I’m hoping that the great interest the IPO created, caused enough people to turn their heads and pay attention to their own LinkedIn Profile.

    LinkedIn isn’t “just here to stay”. It is the new game in town.
    From Recruiting to Personal Branding to Professional Relationship Building, LinkedIn is the new king.

    A year ago, I wrote a blog post titled LinkedIn is the New Monster!

    I think the LinkedIn IPO is a much bigger sign.

    I think society has figured out the value of connecting with people in a virtual way… Now, the question continues… How do we use this new paradigm to recruit people and look for a job?

    The old model of “people hire people” continues… we just have more information than we used to.

  2. I expect that LI will invest some of its new fortune to investigate new ways of making it even less friendly to recruiters and regular members.

    Cheers,

    Keith

  3. A number of people yesterday posted comments in various forums in which they essentially said let’s give LinkedIn’s stock 90 days to settle down and then see where it is trading. I totally agree.

    LinkedIn can be a great tool in the hands of a good recruiter but that’s a completely separate issue from whether its stock is a good value at $32 let alone $122. Like Jonathan Duarte, I’m a big fan of LinkedIn even though I’m one of the owners of CollegeRecruiter.com job board. And I agree with John Zappe that job boards like ours tend to attract job seekers who are more active than the more passive folks who tend to use social media sites such as LinkedIn. Of course, recruiters who want to fill positions today are often frustrated by the lack of response they receive from passive job seekers but those recruiters tend to believe a little too strongly in the attractiveness of the opportunities they have to offer. Their opportunities first need to convert the passive to active and then get that active to take action. That’s a lot harder than it sounds and, hence, why LinkedIn provides much better value to the good recruiter than the one who posts and prays.

  4. I think the interesting aspect of this is what impact going public will have on LinkedIn users in the future. I bring this questions up in my post “Implications of LinkedIn’s IPO on Job Seekers & Recruiters.” [click on my name to get to the blog.]

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