Investors keen to get in on the online networking craze more than doubled the price of LinkedIn Corp.'s shares on the morning of its IPO.
The initial public offering was priced at $45 US, but demand caused the price to double to more than $90 shortly after opening on the New York Stock Exchange on Thursday. Late in the afternoon, the stock was up even further, to $95.
The pre-market IPO price gave LinkedIn a market value of more than $4 billion, the highest for a U.S. internet company taking its first bow on Wall Street since Google Inc. went public nearly seven years ago. That value itself has now more than doubled.
Filings say the company made $3.4 million in profit last year.
Mutual funds, pension funds and other major money managers got the first chance to buy most of the IPO's 7.84 million shares because stock in these offerings is typically sold to investment bankers' top customers.
The IPO price already was well above LinkedIn's first target of $32 to $35 per share.
The lofty appraisal of LinkedIn reflects the investors' belief that internet services connecting people with common interests will be able to make more money as the web's audience steadily expands.
LinkedIn's valuation eventually may look modest compared with other internet companies being touted as potentially going public in the next 18 months.
The short list includes: online messaging service Twitter, web game maker Zynga, coupon site Groupon and Facebook, the social network that boasts more than 500 million users.
LinkedIn, based down the street from Google's Mountain View, Calif., headquarters, runs a website that serves as part Rolodex, part hiring centre for people trying to meet people who might further their careers and businesses searching for talented employees. More than 102 million people have set up LinkedIn profiles so far. Another million join each week.
The company makes most of its money from fees charged for better access to the data on its website. LinkedIn earned $3.4 million on revenue of $243 million last year but expects to lose money this year as it invests in new products and more computers to run its services.
LinkedIn's CEO is Jeff Weiner, a former Yahoo Inc. executive who has been running the professional networking company for the past two years. The company's stock trades under the ticker LNKD on the New York Stock Exchange.