Based on LinkedIn’s public debut today, the Bubble-ometer detected
the slightest silhouette of a bubble brewing – an inevitable consequence of public
market trading. The stock which was issued at $45 reached $122.70 before
closing at $94.25 on trading volume of 30.2 million shares.
LinkedIn represents the first social media company to have
come of age in the secondary markets and graduate to IPO stardom. Today’s
activity demonstrates the voracious demand for social media companies and the
lack of supply in the public markets. This should bode well for the private
company marketplace as accredited investors clamor to accumulate other pre-IPO social media stocks that can soon be fed to insatiable retail investors.
It’s beginning to look a lot like Christmas or at least 1995
when Netscape made its appearance onto the public stage. Much like dot com
propelled NASDAQ nearly two decades ago; I believe the current social and
mobile revolution will drive today’s private company marketplace. We have only just begun.
On a completely unrelated subject, NextStreet Journal is about to go through yet another name change (apparently trademark infringement is taken very seriously). I hope, as they say, three times is a charm. Any ideas for a new name would be greatly appreciated.
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Intereseting timeline graph….the mid to late 90s were all about aggregating “eyeballs” to website, the first 10 yrs of this decade have beeen about aggregating profiles of “digitally connected” people and finally selling them things, the next evolution will be aggregating and interacting with cell phone users in a meaningful and monetizing way—tablets and cell phones are replacing PCs rapdily
Thank you for discussing it. This stuff help us all is quite helpful. My personal attention will bewatch baume & mercier
Next up after LinkedIn (and after Groupon): Zillow, Inc., which filed for an IPO under ticker symbol “Z” (quite remarkable to demand a single-letter ticker symbol incidentally). Zillow at least has a recurring revenue mode.
FYI, Zillow’s founders and employees will likely not make much off of an IPO unless the company’s stock really pops after the opening. The venture capitalists typically have a 2x or 3x return first (plus accrued and unpaid dividends of 8-10% per year) on their convertible preferred stock before the founders and employees receive any return.
In Zillow’s case they have raised $87,000,000 in venture capital in the form of convertible preferred stock with liquidation preferences (according to private company financial data site PrivCo), meaning the first quarter million dollars or so received goes first to the VCs. Interesting to see what Zillow’s valuation will be.
Zillow’s VC funding table pasted below for reference:
source material: http://www.privco.com/private-company/zillow-inc
PRIVATE COMPANY: ZILLOW, INC.
Funding Table:
Date Investor Round Investor Type
10/2005 Benchmark Capital A Venture Capital Firm
Total Round A $32,000,000
07/2006 Undisclosed B Venture Capital Firm
Total Round B $25,000,000
09/2007 Undisclosed C Venture Capital Firm
Total Round C $30,000,000
TOTAL FUNDING RAISED: ZILLOW, INC: $87,000,000
- Wharton MBA Alum / Goldman Sachs Alum
New York, NY