When LinkedIn Goes Public, Here’s Why You’ll Want To Be on Board
by Ryan Cole, Investment U Research
Friday, March 11, 2011
America's employment numbers are frustrating.
One week, we see surprisingly good numbers. The next week, the figures are bad again. And some weeks, it's both - for example, when initial claims and ongoing unemployment don't seem to mesh.
The markets are reacting to these swings with volatile fluctuations of their own. That makes sense, since the recovery depends on consumers really getting back on their feet and spending again.
And many pundits think real estate won't truly bounce back until unemployment has dropped to a healthier 5%.
The contradicting data begs the question if there's even a way to play this jobs market. Fortunately, the answer is a definite, resounding "Yes!"
LinkedIn's IPO: A Strong Contender for Big Growth
It's hard to say exactly when the jobs market will recover, but one thing we can be sure of: When it does, job brokers will have a field day.
Already, one of the more high-profile jobs sites is about go public. At the end of January, LinkedIn filed its paperwork to have an initial public offering (IPO) - one of the more anticipated of the year.
LinkedIn isn't just a social networking site. It's a jobs site that assists members through social networking.
So while tech stocks are getting a little frothy, LinkedIn looks like a strong contender for big growth. Partially, that's because it's in two growth industries: tech and employment.
See, we know the job market will grow at some point. Tech, meanwhile, is lapping most other sectors in growth already.
Could LinkedIn Really Be a Profitable Internet Stock?
LinkedIn recently revealed numbers that look encouraging.
True, it barely made a profit last year - making $10.1 million. But losses and small profits are common among young businesses and since LinkedIn switched from a net loss last year, it's headed in the right direction.
What's more, revenue jumped in 2010. In fact, the first nine months of the year alone saw revenue double all of 2009's sales.
That revenue is split between three different streams, too - job listings, premium subscriptions and advertising - so LinkedIn is somewhat buffered from individualized problems while remaining focused on its core competency. (You can peruse LinkedIn's S-1 SEC IPO filing - which has all these financial stats and many more.)
And while LinkedIn is nowhere near the size of a giant like Facebook, 90 million subscribers is still nothing to sneeze at... especially with such an active membership. The site averaged 65 million unique page views a month in the last quarter.
All signs point to a fast-growing, healthy and profitable tech company that should make a decent splash on the IPO market. Indeed, that's why LinkedIn chose to go public now.
The company hasn't given an IPO date yet, but it's coming... certainly this year and most likely before the summer jobs season.
We'll keep an eye on this as more news develops, but it seems LinkedIn is arriving at the perfect time.