Thoughts on LinkedIn

I was on Headline, BNN’s midday show on financial news, talking to presenter Paul Waldie and fellow guest Jacquie McNish this past Wednesday. The big news then was LinkedIn (LNKD). The first guest, Bill Buhr of Morningstar, spoke to the issues there and we followed shortly after. Watch his video.

Here’s my take on LinkedIn a week later. LinkedIn were the first out of the gate of the big Web 2.0 companies. We still have companies like Facebook, Twitter, Zynga, and Groupon, which are probably more valuable. But being first has its value because demand for these social networking and new media companies is huge.

From the underwriter’s perspective, you hate to see this much of a ramp up post-pricing because it will always leave you open to charges of misreading the capital markets. But all of these companies trade on the Second Market for private companies. There are identifiable market prices – and LinkedIn was trading at $35 a share pre-IPO. So a $45 offering price seems reasonable. Felix Salmon had a good write-up on this a couple of days ago and I agree with him that pricing this deal at $80 a share was a non-starter. In any event, LinkedIn’s success will pull forward the calendar for new IPOs considerably because people will want to get out of the gate yesterday. VC Fred Wilson recently said as much, also effectively confirming Twitter is going to do an IPO. Wall Street is going to be making a lot of money from these deals.

From a macro perspective, Paul Kedrosky makes a good point in saying "California’s prospective state finances just improved dramatically."When thinking about the coming global growth slowdown, that’s a good thing.

We talked about other issues including the IMF and a potential global growth slowdown, which I think is now occurring. Video link below (click on photo).