LinkedIn's spectacular initial public offering will likely encourage other social-media firms to make their stock market debuts, but also heighten fears that the bubble is back. The Mountain View company is the first major U.S. social-networking firm to sell stock on a public market, making it an instant barometer for similar businesses that could do the same in the next year - including the biggest of them all, Palo Alto's Facebook.
Even so, when LinkedIn shares shot out of the gate at $83 each and hit a jaw-dropping high of $122.70, veteran technology analysts shook their heads in disbelief.
"It really is the sign of an irrational exuberance associated with anything that has social in it," said social media analyst Josh Bernoff, senior vice president of Forrester Research. "What you're seeing here is enthusiasm that goes way beyond what the prospects are for the company itself."
Stock in LinkedIn, which specializes in business social networking, eventually settled at $94.25 per share at the close of its first day of trading on the New York Stock Exchange.
But that was still more than twice the value of LinkedIn's initial price of $45 per share set Wednesday night before jumping as soon as the market opened. The company ended Thursday with a market value of about $8.9 billion. It was the biggest Internet company IPO since Google of Mountain View went public in 2004.
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