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LinkedIn Lights the Bubble Pipe

Feels like déjà vu all over again, doesn’t it

LinkedIn's IPO, the new dream machine, opened at $83 Thursday morning, after upping the price of entry 30% to $45 on demand, and in less than two hours it had breached $100 and was flirting with $111 shortly after noon having already seen $122, a performance that - if memory serves - exceeds Google's first day out back in 2004.

The IPO has all sorts of implications for Facebook, Twitter, Zynga and Groupon, the other, bigger social networks waiting in the wings to IPO and watching how LinkedIn is received and if it prospers. If LinkedIn is in nosebleed territory, imagine what they're thinking.

At $45 a share LinkedIn and its professional networking site of 100 million inconstant but up-market users was valued at $4.3 billion, raising $352.8 million - absent the over-allotment - for the company which had earmarked the money for working capital and possible acquisitions. It must regret the money it left on the table.

LinkedIn is also the first concern that's been actively traded on the private markets - at prices closer to its original range of $32-$35 and a value of about $2.5 billion - to go public.

The site made $15.4 million on $243 million in sales last year from premium subscription fees, direct sales to recruiters and ads but expects to lose money this year because of investments in new products, servers and expansion in Europe. Although its revenues could swell to $500 million it's expecting them to slow. Q1 revenues were up 110% to $93.9 million, earning $2.1 million, up 14%.

LinkedIn founder and chairman Reid Hoffman of PayPal fame cashed in less than 1% of his 20% of the company. Values are so changeable you do the math. Now a partner at Greylock, as an angel investor Hoffman's got stakes in Facebook, Zynga and Flickr.

VCs poured upwards of $100 million into LinkedIn since 2003: Sequoia (17.8%) Greylock (14.9%), Bessemer (4.8%), Bain (3.9%)

Its symbol on the New York Stock Exchange is LNKD.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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