Please ensure Javascript is enabled for purposes of website accessibility

What LinkedIn Was Worth Until This Morning

By Morgan Housel – Updated Apr 6, 2017 at 9:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Behold the Big Bang.

SecondMarket, an exchange that lets private investors trade shares of privately held companies, revealed a short history of LinkedIn's (NYSE: LNKD) share price after this morning's monster initial public offering. The IPO was priced at $45, but shares soon traded at more than twice that amount, peaking at $122.

How's that compare to LinkedIn's value over the past year? See for yourself:

Source: SecondMarket. April 2011 share price extrapolated from previous month.

At $122 a share, LinkedIn trades at about 25 times forward revenue, and some ungodly multiple of earnings. How crazy is that? Really, really crazy. Best advice: Keep your distance.

Then again, investors had similar feelings toward Baidu (Nasdaq: BIDU) and Google (Nasdaq: GOOG) after they IPO'd. Both have since been massive successes, minting money for shareholders after what seemed like insane early valuations. After Google's IPO, the New York Times warned:

After a series of missteps, Google finally pulled off its much-hyped initial public offering yesterday. The good news about this unusual I.P.O., which sought to deprive Wall Street banks of full control over the sale, is that it made it easier for individual investors to buy the stock. Of course, that may also be the bad news. At its closing price of just above $100 yesterday, Google is valued at a bubbly $27 billion.

Google is now worth $170 billion, and plenty think it's still a bargain.

What do you think about LinkedIn's IPO?

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended Google and Baidu. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.