Landmark Events: LinkedIn Launches

The social networking site for professionals, LNKD went public today, trading as high as $122.70.

That had to be a thrill for founder and Chairman Reed Hoffman and CEO Jeff Weiner. After trotting around the country, doing the pre-IPO shows, and pitching the company at $32 – $35; they sold 10% of their company at $45/share on Wednesday.

Thursday morning we saw how underwriters make their money.

Bank of America and Morgan Stanley jacked up the price over and over on a delayed opening, finally springing the gate somewhere around $83/share.

It would seem the underwriters manufactured a spare $100 million dollars and slipped out the backdoor, leaving Hoffman and Weiner with an interesting challenge.

Living With A 600 P/E

Hoffman and Weiner will be remembered for the $83 dollar opening – money they may never see.  That would mean their company, a whole five months in the black, will have to perform at impossible levels to satisfy investors who could start losing money immediately.

In the meantime, Hoffman and Weiner are required to wait a year before cashing in, right?

Also leaving a ton of money on the table was Goldman Sachs, selling their entire position at the $45 offering price. But, here’s the thing… Goldman rarely screws up. Word is, they bought their position at $6 in 2008. And when the dust settles, their sell price may end up looking just fine.

After all, can a company’s stock really maintain a Price/Earnings ratio over 600?

Recruiter’s View

Bugs on the windshield. Companies are hiring again, and LinkedIn is a good supplier. The rest doesn’t matter.

We’ve got work to do.