LinkedIn: Your Cheat Sheet to the IPO

Professional social networking site, LinkedIn, has just increased its IPO pricing by 30 percent. The website was originally valued between $32 and $35 per share, but will now sell for between $42 and $45 — elevating its valuation above the $4 billion threshold.

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Aiming to raise roughly $406 million from the deal, LinkedIn will offer a total of 7,840,000 shares to the public. Barring any setbacks, LinkedIn (LNKD) is scheduled to begin trading on the NYSE (NYSE:NYX) this Thursday.

The company has indicated that the funds will generally be used for corporate purposes such as technological investments, administrative expenditures, marketing activities, etc. Given their successful market responses from their original valuation, LinkedIn is obviously increasing its price because it anticipates Wall Street will respond favorably.

In the first quarter of 2011, gross revenue increased to $93.9 million and net income was up to $2.08 million, a marked improvement from the $1.81 million netted in the first quarter of 2010. LinkedIn has benefitted considerably from development of its distinct hiring utilities, which assist professionals aiming to promote job offering and search for potential employees.

While LinkedIn is optimistic about the fate of its public offering, social networking conglomerates such as RenRen (NYSE:RENN) have set a dire precedent. For this Chinese (NYSE:FXI) based company, shares dropped considerably from the $14 IPO as soon as trading began. Whether investors will put their faith in LinkedIn to continue to accelerate revenue growth will be determined when trading begins on Thursday. Will you get LinkedIn?

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