Today was the first day for people to purchase and trade stock in the business oriented social networking web site LinkedIn and it was a very good day for people who decided to put their money it. Venture Beat reports that on the first day of trading on the New York Stock Exchange, the share price of LinkedIn went up from its starting price of $45 all the way up to a high of $122 a share. The price went down to $94 a share before the market closed today. Even at that price that means the market cap for LinkedIn is currently set at a whopping $9 billion. That's much higher than the $4 billion cap that the company set for itself before today's IPO launched. Keep in mind that the company had revenues in 2010 of just $243 million and a profit of only $15.4 million for that year.
One of the big questions is if LinkedIn's stock will stay at that high price or will it go back down. We have seen this happen with the China-based Internet company RenRen which is now trading below its first IPO price after launching earlier in May Also, as this Forbes blog post states, there's a fear that this kind of IPO could be the sign of a new Internet Bubble like we had in the late 1990s when Internet companies seemed to be going public daily. When that bubble burst, the result was massive layoffs, a huge stock market drop and tons of companies shutting down.
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