The world's largest professional network

with more than 433 million members in

200 countries and territories around the
globe.
In 2015, the social networking site which
focuses on business contacts generated
2.99 billion U.S. dollars in revenue.
Acquired many tech companies like
Lynda.com, Mspoke, Pulse etc

LinkedIn IPO
Status
Proposed
Symbol
Exchange
Share Price
Shares Offered
Offer Amount

Priced
(5/19/2011)
LNKD
NYSE
$45.00
7,840,000
$352,800,0
00

Shareholder
3,012,196
Shares Offered
Shares
7,840,000
Lead
Outstanding
Bank of America Merrill Lynch
Underwriter

Lead
Underwriter

J.P. Morgan Securities LLC

IPO Mispricing By
Investment Banks

Underwriters made the

company and its
shareholders to lose to the
tune of an astounding $175
million
Underpriced the deal and
selling LinkedIn's stock to
institutional clients way too
cheaply at 45$ per share
Intraday stock appreciated to
117 at 5PM

The opening price was $83

a share, some 84 percent
higher than the I.P.O.
price.

Reasons behind Mispricing

LinkedIn business model was unproven so was

difficult to value according to Investment Banks
If there were no discount on IPOs, there would
be little incentive for big investors to play ball
before the offering

IBs gave up to 50% discount to

Institutional investors
Didnt do initial public offering using the
Dutch Auction method
Released small number of shares to the
market