LinkedIn is one of the world’s largest professional networking platforms. As of October 2022, LinkedIn has over 830 million members across more than 200 countries and territories. With its massive global reach and popularity, LinkedIn has become an incredibly valuable company. But how much is LinkedIn actually worth in terms of its market capitalization?
What is Market Capitalization?
A company’s market capitalization, commonly referred to as “market cap,” is the total value of a company’s outstanding shares of stock. It is calculated by multiplying the current stock price by the total number of outstanding shares.
For example, if a company has 10 million shares outstanding and its current stock price is $50, then the company’s market cap would be $50 x 10 million = $500 million. The market cap number essentially represents the public consensus on the total value of a company.
LinkedIn’s Market Cap History
LinkedIn first went public with an IPO in May 2011 with an initial stock price of $45 per share. At the time, LinkedIn had around 100 million members globally. Here’s a quick overview of how LinkedIn’s market cap has grown over the years:
- IPO in 2011 at $4.25 billion valuation
- Surpassed $10 billion valuation in 2013
- Exceeded $20 billion valuation in 2014
- Topped $25 billion valuation in 2015
In June 2016, Microsoft acquired LinkedIn for $26.2 billion in an all-cash deal. This acquisition took LinkedIn off the public markets, so it no longer had a fluctuating market cap after that.
LinkedIn’s Last Market Cap as a Public Company
In the months leading up to Microsoft’s acquisition in mid-2016, LinkedIn’s market cap as a publicly traded company surpassed $26 billion. Here’s a quick snapshot of LinkedIn’s market cap and stock price history in its final year as a public company:
Date | Share Price | Market Cap |
---|---|---|
January 2016 | $108 | $14 billion |
March 2016 | $125 | $16 billion |
May 2016 | $131 | $17 billion |
June 2016 (at acquisition) | $196 | $26 billion |
As you can see, LinkedIn’s market cap grew tremendously in the 18 months leading up to their acquisition. The professional networking platform added over 100 million new members during this period, and revenue and profits were increasing sharply as well.
Microsoft saw major strategic value in acquiring LinkedIn and gaining control of its massive trove of professional data and talent. LinkedIn’s market cap reflected the enormous value that investors saw in the company prior to it being taken private.
LinkedIn’s Value for Microsoft
Although LinkedIn no longer has an independent market cap, it’s value within Microsoft is still quite substantial. While the $26 billion acquisition price was massive, it has proven to be a smart long-term investment for Microsoft for several reasons:
- LinkedIn’s revenue has increased 3x from $3 billion in 2016 to over $10 billion expected in 2022
- The platform has gained over 250 million new members since acquisition
- Microsoft has integrated LinkedIn across its Office 365 and Dynamics software
- LinkedIn’s data helps Microsoft improve its AI capabilities
Additionally, Microsoft as a whole has seen its market cap soar from around $400 billion at the time of the LinkedIn acquisition to nearly $2 trillion today. So while we can’t directly track LinkedIn’s market cap anymore, its value is clearly immense as part of Microsoft’s expanding software and cloud empire.
Current Value of LinkedIn
Although LinkedIn is no longer an independent publicly traded company, analysts can still estimate its stand-alone valuation as part of Microsoft. Here are some recent estimates on what LinkedIn could be worth in today’s market:
- An analyst at Evercore ISI estimated LinkedIn’s value at $60 billion as of early 2021.
- RBC Capital analyst Rishi Jaluria estimated LinkedIn’s current valuation between $40-$60 billion based on its strong advertising and recruitment revenue growth.
- Another analyst at Bernstein pegged LinkedIn’s value at around $27 billion, closer to the initial acquisition price but perhaps undervaluing its growth since then.
Based on LinkedIn’s surging revenues, steady user growth, and integration across Microsoft’s ecosystem, its hypothetical stand-alone value easily seems to be between $50 to $60 billion in late 2022.
Key Takeaways on LinkedIn’s Value
- LinkedIn had a market cap of around $26 billion when it was acquired by Microsoft in 2016.
- The acquisition price was viewed as fair value at the time based on LinkedIn’s growth prospects.
- LinkedIn’s value has likely doubled for Microsoft based on its revenue growth since the acquisition.
- Analyst estimates peg LinkedIn’s current stand-alone valuation between $40 to $60 billion.
Conclusion
LinkedIn’s market capitalization has come a long way since its IPO over a decade ago. While it no longer trades publicly, credible estimates point to LinkedIn being worth upwards of $50 billion+ on its own today. The acquisition by Microsoft has been very fruitful, with LinkedIn’s value rising dramatically and becoming integral to Microsoft’s overall software and cloud strategy. Going forward, LinkedIn’s value proposition of professional networking and recruiting should continue to make it one of the tech sector’s prized assets.