IPO Watch: LinkedIn Files!

LinkedIn, the professional networking website, has filed a registration statement with the SEC as it prepares for an initial public offering.

The company becomes the latest web company to file for an IPO, following Skype, Kayak and Demand Media last year. In its registration statement, LinkedIn does not reveal how many shares in plans to sell but does mention an initial fundraising target of $175 mn.

‘The number of shares to be offered and the price range for the offering have not yet been determined,’ writes Steve Sordello, LinkedIn‘s CFO, in a blog post on the company’s website. ‘A portion of the shares will be issued and sold by LinkedIn and a portion will be sold by certain stockholders of LinkedIn.’

The filing reveals strong growth in LinkedIn’s business. The networking site says its sales doubled during the first nine months of 2010 to $161 mn, while registered users had risen to more than 90 mn by the end of the year. LinkedIn says it does not expect to make a profit in 2011, however.

LinkedIn makes its money in three main ways: paid subscriptions, recruitment and advertising. The company makes roughly a third of its revenues from each area.

The book runners on the offering will be Morgan Stanley, JPMorgan and Bank of America Merrill Lynch. Allen & Company and UBS Securities will act as co-managers on the float.

Following the IPO, LinkedIn co-founder and chairman Reid Hoffman is expected to remain the dominant shareholder.

LinkedIn’s valuation has soared on secondary exchanges in the run-up to its registration. Back in April, the company’s implied value on SharesPost was $1.9 bn. On Thursday it was trading at a valuation of around $2.5 bn.

The planned IPO received a boost on Wednesday when Demand Media, the web content provider, listed successfully on the NYSE and saw its shares rise 33 per cent on the first day of trading.

Investor interest in the next wave of web companies was underscored earlier this month when Facebook raised $1.5 bn through a private share offering, valuing the company at $50 bn.

There is intense speculation that Facebook and coupon site Groupon will also go public at some point in the next 18 months.

Take a look at five social media companies valued at more than $1 bn!

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