Asia World Capital Group: LinkedIn aims to raise $1.2bn in a share issue after its stock increased in value fivefold since its 2011 initial public offering
Online PR News – 10-September-2013 – Hong Kong – Asia World Capital Group: Following the dramatic success and subsequent fivefold surge in the price of stock sold in its initial public offering, LinkedIn, the largest professional-networking site, has approached the US’s SEC (Securities and Exchange Commission) with a filing aimed at raising around $1 billion from a sale of 5.38m Class A shares at a $223; a discount of 6.7% discount to yesterday’s closing price.
LinkedIn stock debuted at $45 in May 2011 and has since soared in line with various events including the doubling of the company’s user base, the addition of features designed to keep users on the site for longer and an increase in subscription fees for recruitment companies.
The forthcoming offering is nearly triple the size of the original LinkedIn IPO despite the fact the company is actually selling less than 2/3rds the number of shares it offered in 2011.
On announcement of the company’s intent, shares in LinkedIn declined by as much as much as 4.3% to $235.50 in after-hours trading before recovering.
“Rights issues or stock offerings dilute the value of existing stockholders’ equity hence the decline,” said a social media analyst at Asia World Capital Group. “Nevertheless, Asia World Capital Group doesn’t see any headwinds facing the company or its business model in the foreseeable future, so we believe there is upside potential for the stock over the medium term,” he concluded.
LinkedIn has returned to the market to raise additional capital once before. In November 2011, it asked investors for $700 million which was to be used as working capital, for development and perhaps, acquisitions. It is thought that the company will list these as the purposes for the cash it raises from the new share offering.
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