Boosted Range Gives LinkedIn a Valuation of Over $4 Billion

May.18.11 | About: LinkedIn (LNKD)

LinkedIn (NYSE:LNKD), the world's leading online professional network, boosted the price range for its upcoming IPO by 30% amid strong institutional demand. The Mountain View, CA-based company now plans to raise $341 million by offering 7.8 million shares at a price range of $42 to $45. The company had previously filed to offer 7.8 million shares at a range of $32 to $35.

Since its launch in May 2003, LinkedIn has grown into the world's largest online professional network, connecting more than 100 million registered members in 200 countries. By creating a free profile, LinkedIn members can search and communicate with business contacts, learn about career opportunities, join industry groups, research organizations and share information. With an expanding user base and rising member engagement driving more data onto its platform, the company has established three fast-growing and high-margin revenue streams: enterprise recruiting solutions, targeted advertising and premium subscriptions.

For the March 1Q 2011, revenue grew 110% to $94 million, primarily as a result of 174% growth in the hiring solutions segment. Advertising sales and premium subscriptions grew at 95% and 47%, respectively, as total registered members grew 58% to over 101 million. However, EBITDA grew only 46% to $13 million as a result of a 181% increase in sales and marketing spend related to the buildout of its sales force. For the last twelve months, revenue and EBITDA were $292 million and $52 million, respectively.

At the midpoint of the revised range, LinkedIn will have a market cap over $4 billion, making it the most valuable US Internet IPO since Google (NASDAQ:GOOG). Morgan Stanley (NYSE:MS), BofA Merrill Lynch (NYSE:BAC) and J.P. Morgan (NYSE:JPM) are the lead managers on the deal, which is on the US IPO calendar for the week of May 16. The company plans to begin trading on the NYSE under the symbol LNKD on Thursday.