LinkedIn is one of the most popular professional social networking sites in the world. As of October 2023, LinkedIn has over 722 million users across more than 200 countries and territories. With so many professionals using LinkedIn to network, build their personal brand, and find job opportunities, it’s no surprise that LinkedIn is a valuable company. But when exactly did LinkedIn have its initial public offering (IPO) and go public?
LinkedIn’s Pre-IPO Years
Before diving into the details of LinkedIn’s IPO, it helps to understand the company’s origins. LinkedIn was founded in December 2002 by Reid Hoffman, Allen Blue, Konstantin Guericke, Eric Ly, and Jean-Luc Vaillant. The five founders had a vision for creating a professional network on the internet.
In its early years, LinkedIn focused on organic growth and expanding its user base. The company relied on funding from venture capitalists like Sequoia Capital, Greylock Partners, and Bessemer Venture Partners. This venture funding helped LinkedIn continue improving its platform and expanding internationally in its pre-IPO years. Here is a quick overview of LinkedIn’s major milestones from its founding up until its IPO:
- LinkedIn website launched May 2003
- Reached 1 million users in March 2004
- Officially became profitable in March 2006
- Reached 10 million users in October 2006
- Expanded to Asia with Tokyo office in October 2007
- Reached 30 million users in July 2008
- Opened office in India in November 2009
- Reached 60 million users in July 2010
- Launched LinkedIn China in February 2011
- Reached 100 million users in March 2011
As these milestones show, LinkedIn experienced rapid growth in the years leading up to its IPO. The company was gaining millions of new users each year and expanding internationally. This growth laid the groundwork for LinkedIn’s eventual IPO.
Preparing for the Initial Public Offering
By 2010, LinkedIn was ready to start preparing for its initial public offering. As one of the first major social networks to go public, LinkedIn aimed to avoid some of the mistakes made by companies like Friendster or MySpace. It wanted to have a clean cap table and solid financials before pursuing an IPO.
In October 2010, LinkedIn announced that it had reached profitability for the first time since its founding back in 2002. This was a major milestone on the path towards an IPO.
Over the next several months, LinkedIn began putting the pieces in place for its stock market debut:
- In January 2011, LinkedIn restructured its ownership stakes to simplify its cap table ahead of an IPO.
- In the fall of 2010, LinkedIn hired Steve Sordello as CFO to add experience in preparation for going public.
- In January 2011, LinkedIn announced plans to expand its San Francisco headquarters to accommodate growing teams.
- In April 2011, LinkedIn filed paperwork with the SEC to go public.
Filing the S-1 paperwork was a major step in LinkedIn’s plan to go public. The company hired Morgan Stanley, Bank of America, and J.P. Morgan as underwriters to facilitate the IPO. With its paperwork filed, all that remained was setting the IPO date and finalizing the pricing.
LinkedIn’s IPO
After months of preparation, LinkedIn finally went public on May 19, 2011. The company set an initial pricing of $45 per share. However, on its first day of trading, LNKD opened at $83 per share – well above the initial target. By the end of its first trading day, LNKD closed at $94.25 per share.
Here are some key facts and figures from LinkedIn’s IPO:
- IPO date: May 19, 2011
- IPO price: $45 per share
- Opening share price: $83
- First day close: $94.25 per share
- Ticker symbol: LNKD
- Shares offered: 7.84 million
- Total shares outstanding: 117.6 million
- Amount raised: $352.8 million
The strong pricing and first day pop in share price demonstrated investors’ confidence in LinkedIn and the growth potential of professional social networking. The IPO valued LinkedIn at over $8.9 billion.
LinkedIn’s IPO stands out for several reasons:
- It was one of the first major social media companies to go public
- Its shares more than doubled on the first day of trading – a big “pop”
- It raised one of the highest amounts for a tech/internet IPO since Google in 2004
- It achieved a high valuation despite being less well-known than sites like Facebook
In the months following its IPO, LinkedIn’s share price continued to rise. The company hit a market cap of over $9 billion in September 2011. This gave the IPO an impressive 4x return for early investors. However, some industry observers cautioned that LinkedIn’s valuation seemed high given the company’s 2011 revenue of just $243 million.
Post-IPO Growth and Acquisitions
Going public allowed LinkedIn to raise money for growth and expand products and teams. In the years since its IPO, LinkedIn has:
- Grown monthly active users to over 722 million as of October 2023
- Launched new features like LinkedIn Learning and video sharing
- Expanded its marketing platform and recruiting products
- Opened offices globally in cities like Singapore, Sydney, and London
- Grown annual revenue to over $10 billion in 2021
LinkedIn also used money from its IPO to make strategic acquisitions. Major acquisitions after the IPO include:
- SlideShare for $119 million in 2012
- Pulse for $90 million in 2013
- Lynda.com for $1.5 billion in 2015
- Glint for $400 million in 2018
These acquisitions helped LinkedIn expand its content and learning offerings. They also bolstered its ability to provide talent management software and insights to employers.
LinkedIn’s Stock Price Since IPO
LinkedIn’s stock has experienced its ups and downs since its 2011 IPO. Here is a quick overview of LNKD’s price history:
Date | Stock Price Milestone |
---|---|
May 19, 2011 | IPO at $45 per share |
February 16, 2015 | Reaches all-time high of $276 per share |
February 8, 2016 | Drops below IPO price to $44 per share |
December 8, 2016 | Microsoft acquires LinkedIn for $196 per share |
As the table shows, LNKD stock saw lots of ups and downs after its IPO. Growth slowed in 2012-2013, but the stock regained momentum starting in 2014. Its February 2015 high came after LinkedIn reported strong earnings. But by early 2016, growth concerns pushed LNKD back down near its IPO level.
In June 2016, Microsoft announced plans to acquire LinkedIn for $26.2 billion. It offered $196 per share, representing a 50% premium over LinkedIn’s price at the time. The deal closed officially in December 2016, taking LNKD shares private again.
LinkedIn’s Lasting Impact from IPO
While LinkedIn is no longer a public company after being acquired by Microsoft, its IPO had long-lasting impacts:
- It paved the way for other social media IPOs like Facebook, Groupon, and Zynga
- It signaled the business value of professional social networking
- It allowed LinkedIn to raise money for acquisitions and product development
- It demonstrated an enterprise software company valuations could rival consumer tech giants
- It generated a significant return for early LinkedIn investors and employees
So while LinkedIn only traded publicly for around 5 years, its IPO was a seminal event for both the company and the tech industry as a whole. It marked the start of a period of massive growth for the professional networking platform.
Conclusion
LinkedIn held its initial public offering on May 19, 2011 after almost a decade of private venture funding and growth. The IPO was priced at $45 per share but nearly doubled on its first day of trading. In the post-IPO years, LinkedIn boosted user growth, launched new products, and made major acquisitions before being acquired itself by Microsoft in 2016. LinkedIn’s IPO demonstrated the potential of professional social networks and paved the way for future social media IPOs. While no longer publicly traded today, LinkedIn’s IPO allowed the company to significantly expand its platform and services.