linkedin ipo
linkedin ipo
linkedin stocks are up 90% in first day of trading . Did any bogleheads get to participate in this ipo and make some quick bucks ? How can i participate in in similiar ipo ?
http://finance.yahoo.com/q?s=LNKD&ql=1
http://finance.yahoo.com/q?s=LNKD&ql=1
The stock is up 90%...is there a way the public could have actually earned that?
"It began trading Thursday on New York Stock Exchange under the ticker symbol LNKD (LNKD). Shares began trading at $83 each and quickly rose above $90, before falling back a bit to $85.97 at 10:30 a.m. ET."
http://money.cnn.com/2011/05/19/technol ... htm?hpt=T2
"It began trading Thursday on New York Stock Exchange under the ticker symbol LNKD (LNKD). Shares began trading at $83 each and quickly rose above $90, before falling back a bit to $85.97 at 10:30 a.m. ET."
http://money.cnn.com/2011/05/19/technol ... htm?hpt=T2
- simplesimon
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The Social Bubble? The 'Not'working Bubble?jebmke wrote:does have that feel, doesn't it. What will they call it -- the twit bubble?Tuxx wrote:Turned on CNBC, the pom poms are out. Having 1999 flashbacks.
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If you received shares as part of the IPO process as an insider yes, you are locked in. That lock in is usually something like 6 months or more.kenyan wrote:Aren't there some IPOs that don't allow you to sell for some period of time afterwards? Is this one of them?
Note - I know very little about IPOs, so forgive my ignorance.
Best the general public could buy in at was around $85... So there was no 90% gains..
Still, there is obviously some money to make from the "greater fools"... It's trading at a 500-1000 PE ratio right now...
That's completely insane, but there are obviously some very stupid people out there... It's definitely not a long-term holding..
Facebook would be an interesting gamble... Buy and sell the same day to the bigger idiots out there...
I think I'll pass though.
Still, there is obviously some money to make from the "greater fools"... It's trading at a 500-1000 PE ratio right now...
That's completely insane, but there are obviously some very stupid people out there... It's definitely not a long-term holding..
Facebook would be an interesting gamble... Buy and sell the same day to the bigger idiots out there...
I think I'll pass though.
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No, LinkedIn is not a fad and it will not go away.riverguy wrote:Just another scam job by the investment banks. Look how much money the company left on the table. What do you bet they will take the over-allotment?:D
As far as an 8 billion dollar company? Good luck with that. Linkedin will be another fad that comes and goes. Hello 1999. Hello Myspace.
But its not even a $1B market cap company thats for sure. With revenue of $8m? Even at a high growth PE of 50 we'll say, thats only a cap of $400M
You should know that IPOs are unshortable for 30 days. Blame the SEC, not IB - they want to encourage the bubbles in new stocks apparently by making it illegal to have the opposite opinion.Snowjob wrote:Tried to short this mulitple times around 105 and 110 today but I keep getting error messages from IB "no contracts available to short"
It's only at 106 now, spiked at 122.70. Here's what I don't get. Doesn't this just mean the investment bank that IPO'd the stock did a piss poor job?
I mean if I was the Linkedin CEO, and the company sold 7.84 million shares at $45 each, but the market priced them at $106 each, didn't the company just get screwed out of $478,000,000? That $478,000,000 went to the preferred customers of the investment bank that took Linkedin public. I know the CEO is probably happy personally, since his paper value in the company is now worth >$200 million.
I mean if I was the Linkedin CEO, and the company sold 7.84 million shares at $45 each, but the market priced them at $106 each, didn't the company just get screwed out of $478,000,000? That $478,000,000 went to the preferred customers of the investment bank that took Linkedin public. I know the CEO is probably happy personally, since his paper value in the company is now worth >$200 million.
Yeah, but it's not really worth that much.. By the time those people who got in before the IPO can actually sell their shares, it will probably be much lower. Check the price in 6 months and see if the investment bankers did a good job of pricing it at $40Bruin wrote:It's only at 106 now, spiked at 122.70. Here's what I don't get. Doesn't this just mean the investment bank that IPO'd the stock did a piss poor job?
I mean if I was the Linkedin CEO, and the company sold 7.84 million shares at $45 each, but the market priced them at $106 each, didn't the company just get screwed out of $478,000,000? That $478,000,000 went to the preferred customers of the investment bank that took Linkedin public. I know the CEO is probably happy personally, since his paper value in the company is now worth >$200 million.
So let me get this straight.
1) General public wouldn't have been able to buy it at $45 a pop? Only around $85 because that's what it was when the market opened?
2) And once they would have bought the shares, they couldn't have sold them when the price hit $120? They need to hold on to the shares for 30 days before they can sell it back on the market again?
Help a noob understand. Thanks.
1) General public wouldn't have been able to buy it at $45 a pop? Only around $85 because that's what it was when the market opened?
2) And once they would have bought the shares, they couldn't have sold them when the price hit $120? They need to hold on to the shares for 30 days before they can sell it back on the market again?
Help a noob understand. Thanks.
Right, only a ~20% return instead of >100%.bonoz wrote:1) General public wouldn't have been able to buy it at $45 a pop? Only around $85 because that's what it was when the market opened?
You can sell whenever you want, unless you're an employee or something with a special restriction. Shorting is different.2) And once they would have bought the shares, they couldn't have sold them when the price hit $120? They need to hold on to the shares for 30 days before they can sell it back on the market again?
Well, yes and no. It's very possible the price of the stock could drop over the next 6 months - which is relevant to the value of the CEO's stock (since he probably can't cash it in 6 months).rrosenkoetter wrote:Yeah, but it's not really worth that much.. By the time those people who got in before the IPO can actually sell their shares, it will probably be much lower. Check the price in 6 months and see if the investment bankers did a good job of pricing it at $40Bruin wrote:It's only at 106 now, spiked at 122.70. Here's what I don't get. Doesn't this just mean the investment bank that IPO'd the stock did a piss poor job?
I mean if I was the Linkedin CEO, and the company sold 7.84 million shares at $45 each, but the market priced them at $106 each, didn't the company just get screwed out of $478,000,000? That $478,000,000 went to the preferred customers of the investment bank that took Linkedin public. I know the CEO is probably happy personally, since his paper value in the company is now worth >$200 million.
But that's not relevant to the cash inflow that Linkedin received - if Linkedin only received $45 per share today (yesterday), but the market priced their stock at $106 today, if you were Linkedin's board wouldn't you be upset? What happens with the stock price 6 months from now is not relevant to what Linkedin could have gotten today.
But had I bought the shares as part of the IPO process.. I'd be locked in?xerty24 wrote:Right, only a ~20% return instead of >100%.bonoz wrote:1) General public wouldn't have been able to buy it at $45 a pop? Only around $85 because that's what it was when the market opened?
You can sell whenever you want, unless you're an employee or something with a special restriction. Shorting is different.2) And once they would have bought the shares, they couldn't have sold them when the price hit $120? They need to hold on to the shares for 30 days before they can sell it back on the market again?
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Good pointBruin wrote:Well, yes and no. It's very possible the price of the stock could drop over the next 6 months - which is relevant to the value of the CEO's stock (since he probably can't cash it in 6 months).rrosenkoetter wrote:Yeah, but it's not really worth that much.. By the time those people who got in before the IPO can actually sell their shares, it will probably be much lower. Check the price in 6 months and see if the investment bankers did a good job of pricing it at $40Bruin wrote:It's only at 106 now, spiked at 122.70. Here's what I don't get. Doesn't this just mean the investment bank that IPO'd the stock did a piss poor job?
I mean if I was the Linkedin CEO, and the company sold 7.84 million shares at $45 each, but the market priced them at $106 each, didn't the company just get screwed out of $478,000,000? That $478,000,000 went to the preferred customers of the investment bank that took Linkedin public. I know the CEO is probably happy personally, since his paper value in the company is now worth >$200 million.
But that's not relevant to the cash inflow that Linkedin received - if Linkedin only received $45 per share today (yesterday), but the market priced their stock at $106 today, if you were Linkedin's board wouldn't you be upset? What happens with the stock price 6 months from now is not relevant to what Linkedin could have gotten today.
Some of the people who got shares at the low IPO price can sell right aways. Others have to wait 6 months... Institutional buyers (like mutual funds) may have gotten in at the low price. Employees also (they are the ones that for sure have to wait to sell).bonoz wrote:But had I bought the shares as part of the IPO process.. I'd be locked in?xerty24 wrote:Right, only a ~20% return instead of >100%.bonoz wrote:1) General public wouldn't have been able to buy it at $45 a pop? Only around $85 because that's what it was when the market opened?
You can sell whenever you want, unless you're an employee or something with a special restriction. Shorting is different.2) And once they would have bought the shares, they couldn't have sold them when the price hit $120? They need to hold on to the shares for 30 days before they can sell it back on the market again?
As a member of the general public, you usually lose money investing in an IPO the first day. But not always! Roll the dice!
Last edited by HomerJ on Thu May 19, 2011 2:02 pm, edited 1 time in total.
How do we know who gets to sell them right away and who has to keep them for 6 months? How can one be a part of the either group?rrosenkoetter wrote:Some of the people who got shares at the low IPO price can sell right aways. Others have to wait 6 months... Institutional buyers (like mutual funds) may have gotten in at the low price. Employees also (they are the ones that for sure have to wait to sell).bonoz wrote:But had I bought the shares as part of the IPO process.. I'd be locked in?xerty24 wrote:Right, only a ~20% return instead of >100%.bonoz wrote:1) General public wouldn't have been able to buy it at $45 a pop? Only around $85 because that's what it was when the market opened?
You can sell whenever you want, unless you're an employee or something with a special restriction. Shorting is different.2) And once they would have bought the shares, they couldn't have sold them when the price hit $120? They need to hold on to the shares for 30 days before they can sell it back on the market again?
As a member of the general public, you usually lose money investing in an IPO the first day. But not always! Roll the dice!
Well that would explain it. I thought they couldnt find someone willing to lend me shares !xerty24 wrote:You should know that IPOs are unshortable for 30 days. Blame the SEC, not IB - they want to encourage the bubbles in new stocks apparently by making it illegal to have the opposite opinion.Snowjob wrote:Tried to short this mulitple times around 105 and 110 today but I keep getting error messages from IB "no contracts available to short"
That's why they only sell a small portion of shares with the IPO. It looks like only 8% of the company's shares were sold, so the 92% remaining are currently valued at $100 or so. They'll sell more of those over time.Bruin wrote:But that's not relevant to the cash inflow that Linkedin received - if Linkedin only received $45 per share today (yesterday), but the market priced their stock at $106 today, if you were Linkedin's board wouldn't you be upset? What happens with the stock price 6 months from now is not relevant to what Linkedin could have gotten today.
If you are an insider of a company that is going public, I'm pretty sure you'll know that you are an insider of a company that is going public. If you are not an insider, you can buy and sell whenever you want.bonoz wrote:How do we know who gets to sell them right away and who has to keep them for 6 months? How can one be a part of the either group?
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Exactly, think of it as a very slow pump & dump. They sell 1/10 of the shares now and a price well below demand, resulting in lots of hype and free publicity and greedy/optimistic sentiment about their company. Then, over the next year or two they'll try to unload many of the remaining shares at the artificially high price. Scarcity, artificial or otherwise, can certainly engender a lot of irrational demand.matt wrote:That's why they only sell a small portion of shares with the IPO. It looks like only 8% of the company's shares were sold, so the 92% remaining are currently valued at $100 or so. They'll sell more of those over time.Bruin wrote:But that's not relevant to the cash inflow that Linkedin received - if Linkedin only received $45 per share today (yesterday), but the market priced their stock at $106 today, if you were Linkedin's board wouldn't you be upset? What happens with the stock price 6 months from now is not relevant to what Linkedin could have gotten today.
Thanks, yours and Matt's explanation makes sense.xerty24 wrote:Exactly, think of it as a very slow pump & dump. They sell 1/10 of the shares now and a price well below demand, resulting in lots of hype and free publicity and greedy/optimistic sentiment about their company. Then, over the next year or two they'll try to unload many of the remaining shares at the artificially high price. Scarcity, artificial or otherwise, can certainly engender a lot of irrational demand.matt wrote:That's why they only sell a small portion of shares with the IPO. It looks like only 8% of the company's shares were sold, so the 92% remaining are currently valued at $100 or so. They'll sell more of those over time.Bruin wrote:But that's not relevant to the cash inflow that Linkedin received - if Linkedin only received $45 per share today (yesterday), but the market priced their stock at $106 today, if you were Linkedin's board wouldn't you be upset? What happens with the stock price 6 months from now is not relevant to what Linkedin could have gotten today.
So the IPO is just one big marketing event where the company paid marketing fees equal to Market Price of the Shares ($90) less the IPO Price ($45) times the number of shares sold that day (7.84 million). Then they get to cash in by hoping the price of the shares stay close to $90 and they slowly sell A LOT more shares over time.
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I have had a Linkedin account for a year or so.. it's pretty much worthless, unless you are looking for a job. The thing I don't like is the site keeps sending me e-mails telling me that people I know are linked to other people. So what? It's also trying to sell me a premium membership, which is of no use to me.
can still buy put options, earlier than the 30 days, if your goal is to short sooner than the 30 days SEC limit as those options are on the market sooner...regardless very very risky...the stock can remain irrational much longer than you can remain solvent...learned my lesson early in my stock trading days...tried to short housing stocks during the recent bubble and although overvalued they went higher after my short...luckily the two i shorted came back down to only slightly more than i paid at which point i said goodbye to the stomach flips, but i learned my lesson and luckily it cost me not to much and it was early on so no real damage...boglehead way of investment really is the way to go for the nerves and stomachxerty24 wrote:You should know that IPOs are unshortable for 30 days. Blame the SEC, not IB - they want to encourage the bubbles in new stocks apparently by making it illegal to have the opposite opinion.Snowjob wrote:Tried to short this mulitple times around 105 and 110 today but I keep getting error messages from IB "no contracts available to short"
Ahh, true. We'll probably never know!Bruin wrote:Question is, did we buy in at $45 or at $90?floydtime wrote:Is linkedin now a publicly traded US company? If so, then I own some, as do most of the people on this forum.
"Do not value money for any more nor any less than its worth; it is a good servant but a bad master" - Alexandre Dumas
No, none of you own any yet, unless you bought the shares for your own account. The indexes don't add new IPOs right away, that only happens once or twice a year.floydtime wrote:Ahh, true. We'll probably never know!Bruin wrote:Question is, did we buy in at $45 or at $90?floydtime wrote:Is linkedin now a publicly traded US company? If so, then I own some, as do most of the people on this forum.
Good point. So we'll probably end up buying it for $19.95.xerty24 wrote:No, none of you own any yet, unless you bought the shares for your own account. The indexes don't add new IPOs right away, that only happens once or twice a year.
"Do not value money for any more nor any less than its worth; it is a good servant but a bad master" - Alexandre Dumas
How dare you compete with GS!Snowjob wrote:Tried to short this mulitple times around 105 and 110 today but I keep getting error messages from IB "no contracts available to short"
Never in the history of market day-traders’ has the obsession with so much massive, sophisticated, & powerful statistical machinery used by the brightest people on earth with such useless results.