Slashdot Mirror
Massive LinkedIn IPO Raises Dotcom Bubble Concerns
The Installer writes with news of yesterday's stock offering from LinkedIn, which shocked investors by closing at more than double the initial price. "Buyers crowded the floor of the New York Stock Exchange, and financial news networks flashed LinkedIn's stock price urgently all day. By the closing bell, the company had a market value of $9 billion, the highest for any Internet company since Google had its initial public offering seven years ago. Millionaires and even one billionaire were made, at least on paper. The stock, issued at $45, went as high as $122.70 just before noon and closed at $94.25 on a trading volume of 30 million shares." That price values the company at over 30 times its 2010 revenue, leading to speculation that this is either evidence of the second dotcom bubble (a possibility we discussed in February) or a "watershed moment for social media." Many experts are questioning the value of LinkedIn, while others are claiming intentional market manipulation.
LinkedIn is filled with professionals. That isn't your everyday farmville-playing soccer moms or pirates who just have free content and who have little market value. These are people who's value is highly over that and they can be offered professional, high paying services and advertising. This is very valuable user base.
I really hope the bubble doesn't burst before I try to cash in on my big idea.
There was this post on LinkedIn about how much money this was going to make for everybody!
DotCommers had a fondness for chewing a lot of bubblegum, and blowing a lot of bubbles with said bubblegum. The rest of the story - bubbles having anything to do with 'stocks' and so on - was pure mainstream media distortion of what really went down. Honestly... ;)
Why did the chicken cross the road? Because Elon Musk put an AI chip in its head.
Goldman-Sachs claims that an online media and directory website written by some snot nosed 20something is worth over 50 billion dollars.
Bubble? Yeah.
Three years ago, I used to recieve endless "Come Join Us on LinkedIn" e-mails to several e-mail accounts. Because at some point an old boss had somehow gave LinkedIn access to his Hotmail or Outlook book or something and created a place holder for me with my first and last name (and also my e-mail address) because my boss had that and only that information in his address book for me. Creeped me right the %*#@ out.
It wasn't hard to get the e-mails to stop but I'd wager that shell of a profile is out there floating around linking my old coworkers in a web -- for any of them that added that profile or had one of the e-mail addresses in their book. At the time, no one seemed to find this alarming but me so whatever. And now Facebook and a lot of sites will harvest your address book for you from Hotmail or whatever and then it will aggressively market that person to come to said social networking site on your behalf. Each site wants to boast fifty billion users (or some factor higher than living human beings), right?
But LinkedIn is really outpacing those sites: an outlook plugin/hijacker, drupal integration, actually a plugin for virtually anything and of course APIs to put it in your site.
So I was wondering what had gone wrong when I heard about its IPO the other day. After all, it's one of the creepiest spammiest social networking sites I've encountered. But that's just it, its methods are effective and so it is rewarded. If privacy abuser Facebook is "worth" the yearly GDP of a small nation, surely a website implementing the same APIs and plugins while experimenting with creepin' it up a notch is going to drive investors crazy. I think it's more a sign of overvaluation of a privacy abuse bubble--one I've been hoping to see pop for quite sometime now.
My work here is dung.
And I never use it. I don't even know what it's for. It's like a limited purpose version of facebook.
This bubble is inflating without a matching increase in hiring. What happens when this bubble pops and the lay offs start? We'll have even more people out of work with nobody wanting to hire them.
I'm pretty sure I had an account on LinkedIn once. Then I realized that it's just another way for a company to capitalize on what should probably be semi-private information: my work-history. Sure, with enough time and effort anyone could figure it out, but to give your entire business social network over to a third-party for data-mining purposes? Not sure I buy that.
The amazing thing about these economic bubbles is that they continue to inflate even though virtually all participants know they're engaging in a bubble. This because they also believe that somewhere out there there's a greater fool, someone else who will, like themselves, ignore the fact that they value thing X below the actual cost of acquiring it
Belief is the currency of delusion.
"He's on LinkedIn, Lemon. He might as well be dead." -Jack Donaghy
Go green: turn off your refrigerator.
I thought we've already been through a second, and possibly a third dot com bubble. Remember myspace selling for some ridiculous amount? Or youtube being bought out? Or Facebook not wanting to reveal its financials, and still selling to people through a convoluted arrangement of not-shares that'd be illegal in the U.S.?
I swear that in the last fifteen years people's ability to remember previous bubbles, and their ability to notice that new "opportunities" are the tiniest of tweaks on old bubbles, has been at historically dismal levels.
SELL!!!!
Ok, I'm a big fan of networking with people. It's probably led to every job I've ever had.
But, it doesn't get around the fact the LinkedIn SUCKS. I mean, do you really want to drag your job into your social media? Hell no. Connecting with friends = fun. Connecting with friends you happen to work with = fun. Connecting with that brown-nosing, tattletale bitch down the hall = not fun. So, as almost useful of a purpose LinkedIn serves, it will never outgrow what it already is. It's hopes, dreams and aspirations are limited. Oh, you want me to post a status update about how I drank a case of beer and pissed on the neighbor's lawn? Maybe on Facebook, certainly not on LinkedIn.
This valuation is definitely bullshit.
----- obSig
I thought everyone had a really great time during the tech bubble.
The bubble, I mean. Yes, it caused serious issues at the end, but during the run up of the bubble, all of the major technology we currently used was developed by that massive influx of capital. Slashdot could not have become what it is without the bubble, and you could say the same about just about every other major technology player in the current market. As for LinkedIn specifically, I'm a bit stunned by the IPO. My LinkedIn account was the 2530th created. That's even better than my Slashdot and ICQ account numbers.
I know of two companies that saved a lot of cash by mining LinkedIn for filling vacant positions rather than paying the standard commission rates they used to pay recruiters (a placement fee of between 25 and 30 percent of the associate's starting yearly salary). Firms *hate* paying recruiters. In fact, some HR people hate recruiters on a professional and a personal level.
There used to be good money in recruiting. If a big chuck of recruiting money moves to LinkedIn, that's a tidal wave of change. I would bet on LinkedIn.
I had an interview with them last year, and concluded that I wanted nothing at all to do with them. I cancelled my account (about 250 connections), and they got all spammy on me. It reminded me of that classic AOL "delete my account" recording.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
For the record, I am at 3 months, and still waiting for the email that will have a link that will let me finish the account removal page of Linked In. (you will be getting an email in the next 24 hours......) Nobody cares there.. I mark every single one of their emails as spam, just to make me feel better...
What are we going to do tonight Brain?
Why would anyone want an account on linked in? More importantly, how on earth is Linked in going to make any money? Ever? Who are the idiots investing in this garbage?
And I never use it. I don't even know what it's for. It's like a limited purpose version of facebook.
The purpose of LinkedIn is to isolate two networks, one for friends and family and one for business and professional. When a co-worker, boss or other professional contact asks for or gives a facebook invite you should redirect them to linkedin. That way professional/business contacts do not see the pics from the weekend partying with your friends.
We have two lives, the fun/personal and the serious/professional. It makes sense to have separate social networks too. As a matter of fact in our minds we already have such a distinction, separate online social networks just mirrors how we are already thinking.
While I understand the concept, I have yet to really find the value. I actually have more client asking me how they ended up on Linkedin and how to get off of it than I do ones asking how to join. What usually ends up happening is one of their clients or contacts sends out Linkedin requests (usually unknowingly) and they more often than not sign up thinking its a legitimate request and some way to exchange documents or keep in contact, the result seems to be spam semi related to their business. I myself still get at least one Linkedin request a week usually from people who have only corresponded with me via an email through craigslist or a forum I am a member of. I have a feeling their "subscriber" base is grossly different from the number of people who actually use it.
It should be obvious that the "public" stock markets are a crooked casino run by the investment banks. They own the cops; all the alphabet agencies that claim to "regulate" trading activity. They own all the politicians, who make the laws that determine whether illicit activity is permitted. They even own the Supreme Court, who says a batch of numbers controlled by an oligarchy is a human being in the eyes of the law and the courts. If you're a single person who raises a flag, the SEC will freeze your assets and try to haul you into court. If you're big enough to be a Madoff, then you get to run your scam until you piss off the wrong people. If you're Goldman Sachs, you're untouchable.
The "public" stock market is meaningless. Its not even where all the "big" action is happening. All the real money making is in the derivatives floor. And most of that are private transactions between banks. That doesn't even include the shadow stock market located outside of NY. That's the place where thousands of transactions are being made at hundredths of a second. What is the economic utility in making trading decisions faster than 1 second, before a human being can even initiate a buy/sell decision? And finally, the real money is made on the commodities floor, where collusion between the oil companies, investment banks, and high end speculators can drive up the price of consumer oil by $1/gal. in the middle of an oil GLUT.
Who gives a damn about Linkedin getting an overvalued IPO? The "public" stock market is meaningless compared the trading activity happening outside of the exchanges. The Facebook IPO didn't even happen on the trading floor! It was a "private" sale to avoid gov't regulators. The NYSE significance is trivial to the global economy. That's why the US gov't is going to allow it to be bought by foreign owners. You can pore through company statements, do your due diligence, read the Wall Street Journal, it doesn't matter. What you and the peons think a company's valuation and quality of its leadership is irrelevant. It'll get wiped down to peanuts by the single flick of an unreported derivatives trade.
There is no America. There is no democracy. There is only IBM and AT&T and DuPont, Dow, General Electric, and Exxon
Saddly you can't short sell the stock for the first 30 days.
i think i even have a cuecat somewhere. no flooz though
so where's my bubble 2.0 swag?
i need to have my museum contributions ready for 2040
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
So, as almost useful of a purpose LinkedIn serves, it will never outgrow what it already is. It's hopes, dreams and aspirations are limited. ... This valuation is definitely bullshit.
Absolutely agreed.
Oh, you want me to post a status update about how I drank a case of beer and pissed on the neighbor's lawn? Maybe on Facebook, certainly not on LinkedIn.
That summarizes the reason for LinkedIn. It's not as your original subject line suggested, a social network for people with no social lives. Rather it is a social network for those who do not need to be aware of your social life. We already categorize people as friends or business contacts in our minds and in our real world social networks, it makes sense to have separate online social networks to match.
Fuck off, spammer.
Yeah, it went from $45 to $94.25, but the average investor couldn't buy the stock until it already had reached $80.
Glad to see that we are both creating a new bubble *and* lining the pockets of the same investment firms responsible for the subprime mortage crash.
Other companies that have ~$10B valuation: Cablevision, Whole Foods, Nordstrom, Southwest Airlines, NYSE, Dr Pepper/Snapple, Clorox, Mattel.
I would purchase any of these companies, which are all profitable, before I would purchase LinkedIn. LinkedIn is clearly overvalued and I suspect people will get burned within the next 3 months. There's also the risk of facebook killing this company in one fell swoop just like they killed Digg with their Like button and that risk is not reflected in the company's valuation.
I must be visiting the wrong parts. At least the web development sections of it are filled with Indians showing exactly why outsourcing web development is a bad idea. The skill level is appalling.
I tried to use it for a while but there seems little point. The jobs offered are often "we post on a world wide forum but only want people within walking distance".
The tech discussion are often some Indian guy asking "what quickest way to do X without understanding anything". The bits of India that do space development are not on LinkedIn.
There is a lot of hype around the site but what is it delivering? At best it could become some kind of global job board with all of the problems of advertisers not properly restricting their ads from reaching everyone. Already think it is annoying that ads from other parts of the country come up? How about other continents?
It is big but what is its actual use? That is what has killed previous bubble companies. Not a lack of size but a lack of actual real world use that people want to pay for. Take the old one of home delivery. I got a home, I work during the day, so a delivery service that comes by would be useful. Useful but not economical. Lot of companies tried the
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
... I add my aunt as my *family*, my buddy as *friend* and my colleague as "work". Family sees pics from family, friends see pics from friends and work doesn't see anything at all. If I post myself I pick what social circles it's for ...
And what about pics that other people post? What happens when they tag you? Do their pics inherit your settings or do you have to manually do something? Even if it is automatically inherited or easy to set manually you are one facebook policy change away from losing that. Given facebook's history I think putting people on a separate network may be more prudent.
VA Linux IPO'd in December 2010 with an opening price of $30. That price skyrocketed to over $300 during the day and closed at $240.
"A plan fiendishly clever in its intricacies"- Homer Simpson
It is not meant to be facebook. Not everyone think social means getting pissed, that you do... well that says a lot about you.
I don't think LinkedIn has the capacity to reach the full potential of the idea which by itself is simple:
A global public job board.
Facebook for you social profile, LinkedIn for your professional one. There are a LOT of companies in need of skilled people but only really recruiting in a very small section of the world. Despite airtravel making the entire world a single day away and lot of skilled people willing to relocate for a job, actually global job hunting is in its infancy.
In theory it would be useful to able to find jobs and positions on a public site with perhaps some exchange of information thrown into the bargain. Sadly that is not what LinkedIn as about. At least the web development sections are overrun by Indians asking newbie questions with an attitude that shows they are just looking to get into the outsourcing business as in the "promise cheap crap, deliver first class quality crap, charge more to polish the turd". There are no doubt highly skilled Indian developers out there but they seem like me to avoid LinkedIn. Yes, I have a profile on LinkedIn, I keep it up to date because it might be useful but have long since given up actually taking part in any discussions. What is the point when any discussion will just get flooded by me-too posts by Indians building up their post count?
If the forums are to mean anything, they got to be policed far more strongly to keep the quality up. Else it will just become the next AOL overrun discussion area.
And as a job board. Well, people can find you but so what? The professional recruiters already find you on pro-boards where they know for certain you are looking and who wants to be contacted by a non-professional? It would need to dig far deeper especially in regards to its world wide nature. Stop jobs showing up for people in areas outside the recruitment zone.
LinkedIn at the moment is little more then a place to have your CV out there and a discussion board for those who have not yet learned there are better places for them. It has potential but it had that potential years ago and they failed to act upon it. This IPO will give them cash but also pressure to start delivering on the promise.
It will be intresting to see what happens.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I think two social networks is sufficient, one for your personal life and one for your professional life. Segmenting friends and family is fine but not as critical as segmenting business contacts. If grandma sees that photo with a joint in one hand and a girl in a bikini in another that's just going to be an embarrassment for you, its not going to mess with your career. One second thought, given the age of most around here grandma is probably a veteran of the counterculture, sexual revolution and free love era so when she sees that pic she'll probably be thinking "(1) how quaint, they still have their tops on and (2) what a sloppy joint, who the hell taught him how to roll". Seriously, few things we are doing today are going to be unfamiliar to the older generations of our families. The only difference is they didn't document their silliness for the world to see.
The stock could only go up this week. Why? Because there were no shares in the public market to short. The options market doesn't get a chance at LNKD until next week which means there are no put options either. Now that there are people who own the shares, we will see shorting appear. Once the options market builds put options, we'll see a flurry of activity there as well. Sure, we'll see the other side, but my opinion is this stock has nowhere to go but down next week (and the coming week).
Double the initial price? That's nothing. Back in my day, we hit TEN TIMES our initial stock price. Even our Friends and Family were millionaires!
Go burst your wussy little bubble wanna-be somewhere else and away from my azaleas.
Damn kids.
Michael Jennings | HPC Systems Engineer, Lawrence Berkeley National Lab | Author, Eterm (eterm.org)
according to Eric S Raymond, the market behavior was perfectly logical.
and uhm, Linus Torvalds and a shitload of other open source people were perfectly logical when they sold their shares before the bubble deflated.
Investors? Ah, fuck them. amiright? Take that money, and run baby. take it and run.
It goes to hedge fund traders who have close relationships with the bank doing the IPO.
I humbly suggest reading Running Money by Andy Kessler, where he describes making something like a million dollars in 2 minutes during the IPO frenzy of the late 1990s.
The bankers get a huge, fat fee from all that IPO money. All those sucker investors pumping that thing up, millions of that goes directly into the pockets of the Goldman people. For 'arranging it'.
Goldman - the same investment bank that would have gone dead up like a fish in 2008 if we, the great american taxpayer, hadn't propped them up.
IPOs have very little to do with legitimate business activity anymore. They are about the churn and the skim. This is Goldman Sachs, remember? The investors, to them, mean about as much as the investors in the ABACUS CDOs meant to them in 2006/2007. IE, they are garbage holes where they can 'dump' aka 'distribute' aka 'sell' their toxic waste.
The businesses they are IPOing mean about as much to them as the CDOs they pumped out. It is not about business, it is not about relationships or industry or creating jobs. It is about skimming, and snorting cocaine off of naked hookers. If you don't believe me, watch "Inside Job", there is an interview with a madam.
but you know. fuck being an honest buiness person. that is so old fashioned. right?
whats the harm in a little stock manipulation, fraud, skimming, etc? its not wrong, hell. fuck those liberal commies. am i right?
capitalism. greed is good. more is good. the most is better.
get that cash any way you can, fuck the haters, fuck the naysayers, and fuck the police.
am i right? better yet, buy off the police, and buy off the congress who oversees the police. hell yeah.
i love that our entire economy is based upon the business model of the fucking drug mafia. i used to think people watched the Sopranos to ponder the nature of morality. now i understand they watched it because they admired tony soprano.
you realize, the crisis of 2008 caused food riots all over the world? people were starving to death?
if you want to know why the world hates 'the west', this shit is why. this shit is why everyone laughs when Obama says he wants to stop corruption in the middle east. we practically have become a nation that is built on corruption. honesty is a fucking joke, the only way to get payed is to whore yourself out to some bank who, in fact, only exists because the taxpayers, all those window washers and mcdonalds cashiers and walmart shelvers, bailed it out.
seriously.
you realize that bear stearns, which funded a lot of those tech IPOs, doesnt exist anymore, right? its dead.
Morgan Stanley, which did a lot of other IPOs... it almost ceased to exist. it had to get bailed out at the last minute by a Japanese company. It was 2 minutes to midnight for Morgan Stanley; it came within a hair's breadth of becoming another Lehman Brothers.
All of that happened because in the late 1990s, they took off all regulations of bubbles. You can say, MAYBE, that it boosted the tech sector. Not something i particularly believe without seeing any evidence but whatever. But that principle, the 'lets go bubble!' thing, as if bubbles are actually positive.... its ludicrous. The major bubbles of history, as described in Devil Take the Hindmost by Edward Chancellor, in general, produce nothing, no advancements. they only produce skimmed off wealth for an elite who dont do much actual work.
Tulipomania being the perfect example. Just because there is a stupidly large market for tulips, doesn't mean that tulip growers really benefit from the bubble in the end. In fact, they are harmed, because their friends, neighbors, and relatives are likely to have lost money, unemployment rocketed up, and people were thrown into poverty. That doesn't benefit anyone except the most braindead, callous, heartless, disconnected jerk-offs who have no concern for the type of society they live in , and would be just as happy behind a walled fortress in some 3rd world country with a privately hired mercenary force as they would be in a walkup in new york city next to a park, a school, a library, a cafe, a jazz club, a theatre, a fire station, an autobody repair shop, etc.
man, i can just smell the 'financial reform'.
The bank that 'handled' this IPO will make millions off this IPO. it will be spread very well to a few 'bankers' in the 'IPO' department.
IE the bookrunners. Morgan Stanley & Co. Incorporated, BofA Merrill Lynch and J.P. Morgan Securities LLC. Allen & Company LLC and UBS Securities LLC are the co-managers.
Morgan Stanley and Merrill Lynch, two of the same companies behind winners like Pets.com.
they cant run the mortgage and CDO ponzi scheme anymore
so they go back to this IPO crap.
and the hedge fund managers who help their 'wealthy investor clients' spot 'market trends' and 'go aggressive' in the 'new paradigm' of 'social entrepeneurship'.
client is another word for sucker.
boosted by bullshit PR stories in the media, like that one about the Princeton people that slashdot faddishly linked to a few weeks back... oh im sure that had nothing at all to do with this IPO. Im sure! oh im so.. oh. oh god
sarcasm overload. sorry.
seriously, how fucking stupid do people have to be before they realize that destroying the economy of the entire fucking planet for their own personal benefit is going to end badly? when people start starving to death on a mass scale, you are going to get a revolution. Do they never read the history of Russia or China?
You can google around the web for linkedin bookrunners
Here they are
Morgan Stanley & Co. Incorporated, BofA Merrill Lynch and J.P. Morgan Securities LLC. Allen & Company LLC and UBS Securities LLC are the co-managers.
these people made a lot from the IPO by getting payed a fat 'fee' for 'arranging it'.
of course some of these, Morgan and Merrill especially, were involved in the first Tech Bubble, and many, many books were written about all of the fraud, lying, and theft that went on in that era.
now the CDO ponzi scheme got shut down, they can go back to the IPO ponzi scheme.
of course Goldman made money, Goldman always makes money. They obviously had a 'special arrangement' with the bookrunners to get a sweet deal on their shares, sell them on the first day. that way, they dont get fucked by the media for screwing everyone if they sell high. someone at goldman is throwing a chair through a window for losing all that potential profit, but someone else is telling them to calm down, they are making it back some other way.
or some other derivatives they have created that i dont even know the name of?
all they need to do is find some idiot fireman's pension fund to take the other side of the CDS (through 'marketing' and 'distribution') and blammo! its CDO land all over again!
the bookrunners for linkedin are as follows:
, Morgan Stanley & Co. Incorporated, BofA Merrill Lynch and J.P. Morgan Securities LLC. Allen & Company LLC and UBS Securities LLC are the co-managers.
UBS just put a whistleblower in jail IIRC
that was a damn fine rant. accurate too. would have liked more details myself but at least you 'get it'.
number of fake / prank / throw-away / duplicate profiles on linkedin is in single-digit percent. these are easily recognized and never included in the number of members reports. i'm affiliated.
In some ways that's a lot. That's 50 a month.
I had to design a layered email system to handle emails from the "opt-in" services. I try to keep my family email for family, so that the new message notifier doesn't give me false alarms too often. (TransUnion has been bad lately...)
I think his point was that if you are already in a good job, getting 50 emails a month from recruiters might be a little distracting.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
Yes, I have a Linked-In profile/account. It lists where I work, and that I'm in school. I haven't logged into my account for at least a year, and that was only because someone from work wanted to add me to their network. If Linked-In disappeared tomorrow, I wouldn't lose anything and I wouldn't care.
Is the stock price worth it? Meh. I worked for a dot com the first time the bubble came around. The people that made money then were the founders, and the people/investment houses that had the resources to play the stock game. That Linked-In is (or is not) a product that people want to buy, is meaningless. Like ~11 years ago, those who held private stock are now rich. Those who know how to work the stock market will make money.
But what's Linked-In going to do for me as a user now that it's worth all this money? Not much.
Karma only matters to me now and zen.
The overall wealth of Americans has not increased over the past 10 years. In fact, the median income of Americans has decreased over the past 10 years. So where is all this value coming from if there is not going to be spendable wealth to back it up?
Numbskulls need to step back and really start re-evaluating the assumptions of modern economic theory in a world where resources are almost fully claimed and wealth creation does have a ceiling.
A lot of people are talking bubble on this one. We have seen it time and again. While LinkedIn may be somewhat overvalued at $9 billion, the true bubble out there right now is Groupon. I have had hands on experience with Groupon reps, and behind that "too cool for school" facade there is a lot of pressure by Groupon to have businesses overstate the value of what is being offered, just so Groupon can hit the 55 percent discount mark. People are going to catch on, the market for online deal sites is already fracturing at an alarming rate, as is evident by the YADDS phenomenon. It will be really interesting to see what the Zynga IPO does, because it is not a household name for many and therefore might offer some sort of yardstick by which to measure Groupon and Twitter when they eventually go public. On a side note, winning at Chess with Friends makes me happy. Losing at Chess with Friends makes me depressed. http://youtu.be/9n-eNpoHgS8