Friday, August 3, 2012

Business Success Video Series #12

Reasons for the LinkedIn IPO

Read more: Video: Reasons for the LinkedIn IPO |

Video Transcript

Hello, this is Vince Rogers with Vince Rogers and Associates. We are going to talk about reason for the LinkedIn IPO. With 150 million registered users, LinkedIn has become synonymous with professional networking. In January of 2011, LinkedIn filed for its IPO and in May 2011 it began trading shares under the symbol, LNKD. LinkedIn is a very successful company and you might ask why would such a successful company want to go public in the first place. Why would they want to share the wealth with the rest of us? Companies decided to go public in order to open themselves up to a larger pool of investors. They no longer can finance their growth through their own revenue, through bank loans or through venture capitalists. LinkedIn's ability to complete an IPO in a bad economy was a sign of strength. This signal to Wall Street and to the public that they were ahead of the competition. This media buzz resulted in wider recognition which led to increased customers and profits. I am Vince Rogers and those are the reasons for the LinkedIn IPO.
Read more: Video: Reasons for the LinkedIn IPO | 

Business Success 12 — Presentation Transcript
  • 1. Business Success Prepared by Vince Rogers & Associates for Demand Studios
  • 2. Reasons for theLinkedIn IPO
  • 3. LinkedIn is the most powerful professional networking site on the internetWith more than 150 million registered users worldwide, the LinkedIn brandname has become as synonymous withprofessional networking as Google has become with searching the internet
  • 4. LinkedIn filed for an initial public offering in January 2011 and traded its first shares on May 19, 2011, under the NYSE symbol "LNKD“So why would a privately owned company that is experiencing astronomical growth and making tons of money for it’s owners want to “go public” and share the wealth with everybody else?
  • 5. People start a business for many reasons One of those reasons is that an entrepreneur has a great idea and they want to see their vision come alive and grow At a certain point, the vision for the company grows to the point whereexpansion requires more money than the company can finance through loans, venture capital or profits
  • 6. When a company reaches that point they may decide to have an IPO“Going Public” allows a greater number of large and small investors to invest in thecompany in return for a share of ownership This enables the company to raise a lot of money for expanding the company withoutborrowing money that they might otherwise have to pay back
  • 7. Although this sharing of ownership interest decreases the original owners stake in the company by a certain percentage, the increased financial investment in thecompany will multiply the value of the company many times over
  • 8. So in general, a company is able to raise a lot of money to expand the company, while giving up some control of the businessSpecifically, in the case of LinkedIn there were other advantages to “going public” that should create long term benefits for the company
  • 9. LinkedIn’s ability to successfully complete an IPO in a bad economy showed a sign of strength that created an enormous media buzz,this positive attention resulted in the company gaining wider recognition and an increase in customers, revenue and profits
  • 10. Also, LinkedIn’s ability to have an IPO first allowed them to beat perceived competitors such asFaceBook, Twitter and direct competitors such as Viadeo to the punch, this positioned them as a leading brand, a stronger company and signaled a perceived vote of confidence from “Wall Street”
  • 11. When your great idea becomes the next LinkedIn,these are the types of strategic and competitive factors that you should also consider before deciding to have your successful IPO

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