![]() 14 In early 2011, LinkedIn, already the largest professional oriented social networking site, was growing fast. The company promoted its global nature by offering its site in six languages: English, Spanish, German, French, Portuguese, and Italian.ġ3 In early 2011, LinkedIn had offices in Australia, Canada, India, Ireland, the Netherlands and the United Kingdom. 12 Since its early days, LinkedIn had attracted members from around the world. 11 By early 2010, LinkedIn had introduced applications to enable members to access its services through mobile devices including iPhones, Palm, and Blackberry. In late 2007, it introduced its Intelligent Applications Platform which enabled web content developers to create professional-focused applications which allowed business partners to embed LinkedIn applications onto their si tes and also business partners to embed their applications onto the LinkedIn site. ![]() 9 The June infusion valued LinkedIn at $1 billion.ġ0 To attract new members and retain existing members, LinkedIn continued to add new servic es and capabilities to its site. ![]() 7 million from several funders including Bain Capital, Goldman Sachs, Bessemer Venture Partners and others. 8 In June and October 2008, LinkedIn raised anot her $75. 8 million in 2007 from Bessemer Venture Partners and European Founders Fund. This included $4.ħ million i n Series A funding from Sequoia Capital in 2003, $10 million in Series B funding in 2004 from Greylock Partners, and a combined $12. LinkedIn attracted significant venture funding in its early years. 6 In early 2007, LinkedIn had nearly 10 million members when Hoffman first announced that the company had reached profitability in March 2006. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. To order copies or request permission to reproduce materials, call 1 -800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to harvard. Cases are not intended to serve as endor sements, sources of primary data, or illustrations of effective or ineffective management.Ĭopyright © 2011, 2012 President and Fellows of Harvard College. HBS cases are developed solely as the basis for class discussion. This case was developed from published sources. Professor Francois Brochet, and James Weber, Senior Researcher, Global Research Group, prepared this case. The company began earning revenue by accepting advertising on its site in 2004 and by posting job listings and selling premium subsc riptions 3 Company Background Reid Hoffman and four cofounders launched LinkedIn in May 2003 in Mountain View California as a web-based site for career management and professional networking activities.Ĥ Within a month of its founding over 4,500 members had joined LinkedIn. 2 In contrast, Capstone Investments initiated coverage on July 6 with a “Sell” rating and a $45 target price per share. In particular, Morgan Stanley and JP Morgan-who had underwritten LinkedIn’s IPO-issued reports on June 28 with “Overweight” recommendations and target prices of $88 and $85, respectively. While little information had been available throughout the 40 -day mandatory “quiet period” during which company insiders and IPO underwriters were prohibited from making public statements, providing forecasts, or issuing research reports, new information was starting to come out about the company. There was pent up demand for nearly any major IPO, but particularly for one in the s ocial media sector. Market participants were excited because IPO activity had been slow in recent years and because no major social networking website traded as a public company. ) LinkedIn observers wondered if the company could possibly be worth that much or whether hype had overtaken reality. ![]() (S ee Exhibit 1 for LinkedIn stock price chart. However, the price had subsequently recovered to reach the $94 mark again in July. We Will Write a Custom Case Study SpecificallyĪfter an eventful first day of trading where trading volume had exceeded 30 million shares and the trading price had reached at one point $123 before closing at $94, LinkedIn’s price had gradually fallen to $64 per share over the following month. ![]()
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