An echo of 1990s-style dotcom euphoria reverberated around Wall Street as shares in LinkedIn, the business-focused social network, more than doubled on their first day of trading, valuing it at nearly $10bn.
The strong reception pointed to pent-up demand for the Facebook generation of young internet companies and is expected to be followed by a spate of initial public offers from other companies linked to the online social networking revolution. But it also drew warnings that a new internet bubble might be in the making, with investors rushing to pay prices far higher than a level that was considered extravagant only days before.
LinkedIn’s shares were trading at $104, up more than 130 per cent on the $45 IPO price. At that price, it is valued at some $9.8bn, almost triple what it began the week at when bankers put a price tag of $32-$35 on the shares. That leaves it at 40 times last year’s sales, on par with where Facebook is valued on private markets.