Tuesday, May 31, 2011

LinkedIn or LinkedOUT?

As one who keeps an eye on the global financial market and the US Stock Market, I've been following the LinkedIn IPO... I'll be watching the stock this week, and possibly "buying in."

You know LinkedIn - if you're a "professional" (whatever that is) you are probably registered and maybe active on the LinkedIn social network, which generated buzz when it went public. But people far more immersed in the world of finance than I seem to have reservations and warnings when it comes to LinkedIn:

Carla Fried blogs on moneywatch.com:
Even if you are clued into the downside of chasing after initial public offerings, and you were content to watch from the sidelines last week as LinkedIn’s IPO more than doubled in its first day of trading, your portfolio could soon face more risk courtesy of LinkedIn.

The relative merits of LinkedIn as an investment, whether it be at its IPO price of $45, or its close (as of Friday) at $93, is somewhat beside the point...

...it will be interesting to see if a string of more eye-popping IPO debuts sets off a broader — yes, here it comes — stock market bubble led by the tech sector. A reprise of the 1990s tech bubble is certainly the story line that emerged after LinkedIn’s one-day double. And it was on Larry Summers’ radar the day after the LinkedIn IPO.
A similar story over at the Wall Street Journal, where Dave Kansas thinks of LinkedIn as "an IPO that popped, then fizzled."
"Hype surrounds a hot offering, such as LinkedIn, and the details of the ensuing months are covered more episodically. Folks move on to the next hot IPO -- last week, a Russian Internet company, Yandex ("The Russian Google"), grabbed headlines with a hot offering. Its shares soared 40% on opening day.

With the success of LinkedIn and Yandex, other companies are busily huddling with lawyers and bankers to get in line for their own IPO. Big names out there include Facebook, of course, but also Groupon, Zynga and LivingSocial.

Anything that can fit into the Social Network/Internet box now looks like a hot ticket. But as my own experience can attest, the markets are fickle. Bankers talk about "the window," meaning the period when the market will gobble up certain offerings. Windows, by definition, open -- and close."
Kansas goes on to detail his own experience being involved in and part of an IPO - you can read that here.

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