By John Letzing, MarketWatch
SAN FRANCISCO (MarketWatch) — LinkedIn Corp.’s dramatic first-day splash on the public markets Thursday presented private exchanges, which have been offering investors pre-IPO access to shares in the professional networking site, an opportunity to strut.
“We feel pretty good today,” said Jeremy Smith, chief strategy officer at SecondMarket, a platform that’s been connecting buyers and sellers of private-company shares since 2008. Smith called LinkedIn’s initial public offering “a pretty good validation of the secondary market.”
Shares of LinkedIn /quotes/comstock/13*!lnkd/quotes/nls/lnkd LNKD -8.92% had been priced at $14.50 a share on SecondMarket in April of last year, rising to $25 a share by December, and reaching $35 by March of this year. Initially priced at $45, shares of LinkedIn jumped to $94.25 by the close of their first day of trading on the New York Stock Exchange.
LinkedIn shares skyrocked on their first day of trading, soaring as high as $122 and closing at $94, more than double its $45 IPO price.
Yet many of the early buyers who snapped up shares of LinkedIn at low prices before they hit the public markets will not be able to cash in any time soon. That’s because the shares they acquired from company employees or founders via SecondMarket or similar services such as SharesPost are subject to lock-up periods, which generally restrict their sale for a period of about six months after a company goes public.
“When you buy over SecondMarket, you become a shareholder like any other, so you’re treated like any other, and, as with most IPOs, most every shareholder is subject to a lock-up agreement,” said SecondMarket’s Smith.
A LinkedIn representative declined to comment, apart from referring to the company’s IPO registration filing.
Left out of LinkedIn IPO? Lucky for you:
Without inside connections, IPOs for social-networking firms like LinkedIn can be perilous to small investors, says Chuck Jaffe.
In that filing, Mountain View, Calif.–based LinkedIn said, “All of our directors and executive officers and the holders of substantially all of our securities have signed lock-up agreements, under which they have agreed not to sell, transfer or dispose of, directly or indirectly, any shares of our common stock … without the prior written consent of Morgan Stanley & Co. Incorporated for a period of 180 days … after the date of this prospectus.”
Morgan Stanley /quotes/comstock/13*!ms/quotes/nls/ms MS +0.32% was the offering’s lead underwriter.
David Weir, chief executive at SharesPost, a platform for private-share buyers and sellers founded in 2009, said an auction of LinkedIn shares in January involved over 95,000 shares at a closing price of $30.79.
The monthly value of LinkedIn rose to $2.8 billion in March of this year, compared with $1.5 billion the previous April, according to SharesPost data. Public investors had set a value of $8.5 billion on LinkedIn by the close of trading Thursday.
Well we have arrived again at a new dot bomb bubble ,There is no way this stock is worth this price and I have absolute faith I will be getting the opportunity to get back all of my pension money the crooks in the Irish Banks gambled away from me.