LinkedIn plans to sell $1 billion worth of stock in a secondary offering, two years after one of the most successful social-media initial public offerings to date and having seen its valuation more than double so far in 2013.
The company said it planned to use the proceeds for general corporate purposes, including further expansion of its product development and international expansion.
“We may also use a portion of the net proceeds for the acquisition of, or investment in, technologies, solutions or businesses that complement our business, although we have no present commitments or agreements to enter into any acquisitions or investments,” LinkedIn said, cited by Reuters.
The offering would sell roughly 4.2 million shares, giving LinkedIn a total of roughly 116 million shares outstanding of Class A and Class B stock, according to a prospectus the company filed with the Securities and Exchange Commission on Tuesday.
After going public at $45 a share in May 2011, LinkedIns stock rose more than 4 times. That includes more than doubling this year alone, with a 13% increase coming after the professional networking service reported better-than-expected second quarter financial results last month.
LinkedIn shares, which closed 2.5% higher on Tuesday at $246.13, fell by 2% in after-hours trading. The company’s market capitalization now stands at $32 billion, up from $4.3 billion at the time of its IPO.
The capital raising comes at a time when internet companies’ valuations have soared following a strong performance in second-quarter earnings. According to Brian Nowak of SIG, a 63% expansion in US internet companies’ price-to-sales multiple is the largest since 2009 and now stands at an average of 5.8 times, the highest in more than seven years.
Its secondary offering comes after that of Tesla Motors in May, another technology company that has taken advantage of a soaring stock price to raise fresh capital. Much of investors’ new-found enthusiasm for the internet sector has been driven by web companies’ promising shift to mobile advertising and transactions, which had been seen as a cause of disruption.
LinkedIn shares jumped 2.54% in yesterday trading session while having advanced more than 110% year-to-date.
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