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Thread: Is LinkedIN really work $10B?

  1. #1
    Moderator SteveGerencser's Avatar
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    Is LinkedIN really work $10B?

    I've been watching the ipo for LNKD with a lot of interest. After having survived the first tech bubble mostly intact, and survived the recession mostly intact, I have to wonder if a 650x revenue valuation is a legitimate value or is it another bubble coming down the hill?

    For reference, LinkedIn posted a $15M profit last year and projects a loss for this year.. Yet the company have been valued at $10B..

    Add to this, does this mean the Facebook is a $100B company?? What do you think about the stock prices, especially since "regular people" can't get opening IPO prices..
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  2. #2
    WebProWorld MVP dburdon's Avatar
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    LinkedIn - IPO

    Steve,

    The LinkedIn $10 billion market capitalisation is based on an IPO. Sounds like 1999 all over again. The early investors are given an escape route whilst the pension funds and small investors pay over the odds.

    1. 40 times annual revenue seems way on the top side.
    2. LinkediIn loyalists and early adopters will desert in their droves as LinkedIn tries to aggressively monetise the membership base.
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  3. #3
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    no, not today, hard to see them ever justifying this crazy number based on their revenues.

  4. #4
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    I am not an investor.

    I've heard people mention the valuation for a company is based on how much money it will make total. I wish I knew the truth, but let's guess that it flatlined with no profit growth or adjustments for infinity.

    It would take
    10 billion / 15 million = 666.666667 years

    Looks like Satan to me.

    Who knows for sure right?

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  5. #5
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    There's no doubt it's considerably overvalued at the moment. But I think people see potential in it because of the fact that it's social media, it's growing, and it's not going away anytime soon. The income of an average LinkedIn user is in the six figures, so there is a very high potential for earning.
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  6. #6
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    Compare linked in and their projected revenue, vs quinstreet and their revenues...then check out the market cap difference...I would put my money in quinstreet all day long as they have some of the worlds best web properties, I think you will see an eventual decline in the pps of linked in, their share price simply is not sustainable...on the flip side, I dont think saying Facebook has the potential to be a 100 billion dollar company is a stretch, they have such a large, dedicated audience and are just scratching the surface for their potential.

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