Update: CRAZY, crazy action in LinkedIn, which priced at $45 last night, opened over $80, rallied to $90, then went to $100, and then up to $110 in a matter of seconds.
And now $120.
And now it’s down to $103. Wild!
Original post: LinkedIn priced last night at $45, and naturally there’s going to be a huge opening pop.
Early indication (via Bloomberg) is that it will come out of the gates at around $75-$80. Update: It’s opened at around $81. Update 2: It’s now trading at its highs of the day, at $100.
Obviously, that’s a HUGE win for the people who got in on the IPO, and people will howl about the banks screwing up, and underpricing the IPO, but this is just how it works.
Sure, the company gets less than it (theoretically) could have in the offering, but part of the payment to the banks is leaving some food on the table for their favoured clients. This is a key point about how IPO payments are funded.
Don’t want to leave a lot on the table? Go have Joe & Bob’s Investment Bank underwrite your offering. Good luck.
Anyway, congrats to LinkedIn, and for anyone buying at these levels, good luck on the rollercoaster!