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Linkedin Inc

In: Business and Management

Submitted By withnmyself
Words 655
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Reid Hoffman founded Linkedin, Inc. a social networking site in 2002 for professionals to network; however, Reid also had prestigious co-founders where on the journey with him. The company was incorporated in Delaware in March 2003 under the name LinkedIn, Ltd. and changed their name to LinkedIn Corporation in January 2005. Dan Nye was hired as CEO, but only stayed there 2 years and Deep Nishar was hired as VP of products, who is a form Google executive. This company client list was very diverse ranging with professionals from over 200 different countries along with executives from every 500 company ( Hoffman learned the ropes from the best like Apple and Fujuitsu, so that he could launch his company properly. Hoffman actually financed the start-up of his company his self from the sale of his Paypal to eBay.

The cornerstone of LinkedIn’s business strategy was to focus on the members first. They provided the majority of their solutions to their members at no cost. With the belief that this approach provides the best way to continue to build a critical mass of members, resulting in beneficial network effects that promote greater utilization of our solutions, higher levels of engagement and increased value for all of our members. Hoffman strategically planned each step to grow LinkedIn, in 2005, he launched 3 streams of revenue ~ job listings, subscriptions, and advertising.

In 2011, LinkedIn decided to submit an underwritten IPO as a measure to raise additional capital to fund further expansion and general corporate purpose, along with capital expenditures. The company also proposed the possibility of using some of the profits for acquisitions in complementary businesses, technologies or other assets. The founders felt that the social media market was strong and they needed to capture investors now before other well-known social media companies bet them too. The company’s shares started trading on the New York Stock Exchange on May 19, 2011 under the symbol LNKD at an offering price of $45.00 per share ( The company felt that the NYSE was a great fit based on their understanding of their business and their vision of their partnership. By the end of the close on the first day was $94.25. It appears that the underwriters underpriced and sold stock at the 45.00 the day it debut but the next it was up to about 94.00, which meant they left about 175 million on the table.
The company chose Morgan Stanley and Bank of America’s Merrill Lynch division as its investment bankers. They were paid 7% of the deal as their fee. The 7.84 million shares it sold raised $352 million for the company. 98.3% of the company is insider shares with major holders being Michael Moritz, David, Sze, Tiger Global Management, LLC, Jeff Weiner, and Dipchand Nishar. The current stock price is 106, which has increased since the initial offering (


Forbes. “LinkedIn IPO Doubles, Reid Hoffman Now A Billionaire”. Forbes Inside
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Hoovers. Biggest First Days
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MSN. "LinkedIn Startup”. MSN Money.
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USA Today. “LinkedIn IPO rises 109% on first day, dips on second”. USA Today Money.
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Yahoo. LinkedIn Corporation. Yahoo Finance. Retrieved From:

Stocks & Economy Why hot companies' IPOs open with a huge pop…...

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