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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.
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.
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.
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.
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
It's not investment. It's speculation.
The only investors are ignorant of the lack of genuine value of LinkedIn. (Which is much less than their original price.)
The majority of the people are looking to get rich off of the hype and dump the stock ASAP.
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.