LinkedIn Valuation from 2011 to 2016
Are you on LinkedIn? I am! LinkedIn is a professional career networking platform, headquartered in Silicon Valley. It allows users to create their career profiles and build professional connections with people of shared work-related interest. While other social giants such as Facebook and Instagram connect people in general, i.e., friends, family, school mates, etc, LinkedIn focuses on connecting professionals for career and business purposes.
Although there are other professional online platforms such as Xing and Opportunity, LinkedIn is by far the largest professional networking service. As of 2021, LinkedIn has 810 million members, while Xing has 19 million members and Opportunity has 45,000 members.
The infographic displays LinkedIn valuation over time along with its major highlights. It used quarterly market capitalization to represent LinkedIn valuation from 2011 when the company sold its shares in its initial public offering (IPO) to 2016 when Microsoft acquired the company.
Brief History of LinkedIn before IPO in 2011
LinkedIn began in co-founder Reid Hoffman’s living room in 2002 and was officially launched on May 5, 2003.
The foundation of the professional network giant dates to 2002—even before Facebook foundation—around the time when Dot-Com bubbles burst. In that year, the number of the Internet users just touched 665 million. And more and more people gained access to the Internet for general use.
The platform was launched on 5th May, 2003. Amid the rapid increase in Internet users, LinkedIn achieved 1 million users in August 2004. The company marked the first month of profitability in March 2006. Within four years after the launch, in April 2007, LinkedIn had ten times more users than in 2004.
Its growth accelerated and investors clearly saw potential in this professional networking platform—in 2008, the company received $53 million from several venture capital firms and investors in exchange for a 5% stake in the company. These investors valued LinkedIn at more than $1 billion. Following years saw an aggressive expansion of LinkedIn office across the world: India, Australia, Asia-Pacific, and Europe. The company also took on its first acquisition, mSpoke, in 2010. Ranked at 10th in top 100 most valuable digital companies of 2010, LinkedIn valuation was at $1.575 billion in private markets as of December 2010.
2011 | The Year of IPO | Market Cap Hit $8.5 Billion
The beauty of LinkedIn is that it gives you opportunities to connect with other professionals who you wouldn’t realize you needed to connect with.
– Andrew Der
In January 2011, LinkedIn filed for an IPO. Four month later, May 19th 2011 became the important milestone for the company: LinkedIn started trading at the New York Stock Exchange (NYSE). The company offered 7,840,000 shares at $45 per share under NYSE ticker LNKD, which meant a $4.3 billion valuation.
LinkedIn IPO was huge success. The price rose quickly to $90 soon after 10 AM, hitting $122.70 just before the noon. The company closed trading at $94.25 on the first day, which made LinkedIn valuation $9 billion. The successful LinkedIn IPO brought in more than $350 million, which made LinkedIn one of the largest tech IPOs since Google in 2004.
Although fluctuating, the share price of LNKD in 2011 was on average $81.37, well above its IPO price of $45. LNKD marked the all-time high for 2011 of 115.05 on 28th July. Towards the end of 2011, however, LNKD dropped significantly as insiders unloaded their shared after a typical 180-day lockup period. The lowest price for the year of $55.98 fell on 20th November, which was still above the IPO price.
Looking at its quarterly market capitalization, the second quarter ending Jun 2011 was the best performing period in 2011 with a market capitalization of $8.5 billion. Then the third quarter ending September 2011 marked $7.5 billion and the forth quarter ending December 2011 was $6.1 billion.
2012 | A Transformative Year | Market Cap Grew to $12 Billion
We exited 2011 having successfully revamped our underlying development infrastructure. Based on that investment, we said that 2012 would be a year of accelerated product innovation, and it was.
– Jeff Weiner, former CEO of LinkedIn
Some might recall the 2012 LinkedIn breach where a hacker stole data of 6.5 million LinkedIn users. Despite this infamous event, the company finished 2012 on a high note, passing the milestone of 200 million users. It also acquired SlideShare for $119 million on 3rd May.
According to their 2012 financial results, its revenue for the full year 2012 reached $972.3 million from $522.2 million. That was an 86% increase from the previous year. Especially, the 2012 first quarter recorded strong earnings, a 101% year-over-year increase.
As the company announced strong earnings, the stock prices soared. The highest LNKD stock price for the year was $125.50 on 14th September 2012, which was more than 2.7 times of the IPO price. The average share price for 2012 was $101.17 and the company closed the trading at $114.82 in 2012.
The market capitalization of the company also achieved the milestone of $10 billion. The LinkedIn valuation in terms of market capitalization was $10.4 billion for Q1 2012, $11 billion for Q2, $12.7 billion for Q3, and slightly down at $12.3 billion for Q4. Jeff Weiner, the former CEO of LinkedIn called 2012 “a transformative year for LinkedIn.”
2013 – 2015 | New Tools, Acquisitions, Growth | LinkedIn Valuation at $30B
Our vision at LinkedIn is to create economic opportunity for every member of the 3.3 billion strong global workforce.
– Astif Awan on LinkedIn Blog on 29th October, 2015
Between 2013 and 2015, LinkedIn acquired eight companies: Pulse, Bright.com, Newsle, Bizo, Careerify, Refresh.io, Lynda.com, and Fliptop. The company also kept launching new services such as sponsored updates ad service and user endorsements tools.
The number of employees continued to grow. In 2014, LinkedIn leased a 26-story skyscraper at 222 Second Street, San Francisco, so that the new office could accommodate as many as 2,500 employees. The number of users was also on the rise: as of October 2015, LinkedIn had 400 million members around the world.
LNKD all-time high as of the end of 2015 was $276.18, recorded on 26th February 2015. The average stock price for the period from 2013 to 2015 was $204.97 and the bottom was $109.80. During this time, LinkedIn valuation reached a milestone of $30 billion. However, its strong position was coming to an end towards the end of 2015.
2016 | Acquired by Microsoft | Q1 Market Cap Almost Halved
In the afternoon on 4th February 2016, LinkedIn announced 2015 full year results along with a weaker-than-expected forecast for 2016. The company expected its 2016 full year revenues to be between $3.6 billion and $3.65 billion. This fell short of the average analysts’ estimate of $3.91 billion.
The following day experienced the sharpest decline in LNKD stock prices since its IPO in 2011. It hit a three-year low of $108.38 per share, down 44%, erasing nearly $11 billion in LinkedIn valuation. As a result, the market capitalization for Q1 2016 was as low as $15.1 billion, nearly half of the market capitalization of Q4 2015 ($29.5 billion).
On 13th June 2016, Microsoft and LinkedIn announced that Microsoft would acquire LinkedIn for $196 per share in an all-cash transaction—a $26.2 billion acquisition. It was the largest acquisition by Microsoft at that time and is the second largest as of 2022 (The largest today is Activision Blizzard for $68.7 billion that was announced in January 2022). According to Microsoft, the acquisition aimed to grow the professional networking site and integrate it with Microsoft’s enterprise software, such as Office 365. Microsoft completed the acquisition of LinkedIn on 8th December 2016. And Jeff Weiner remained CEO of LinkedIn, retaining LinkedIn’s distinctive brand, culture and independence.
Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn’s network, now gives us a chance to also change the way the world works.
–Jeff Weiner, former CEO of LinkedIn
Founded in 2002 and launched in 2003, LinkedIn has long stood as the largest business-oriented social networking platform. Within four years after the launch, LinkedIn achieved a milestone of 10 million users worldwide. LinkedIn valuation jumped to $1.575 billion at the end of 2010.
The company went public with an IPO priced at $45 per share on 19th May 2011. The share price surged by 84% on the same day, giving LinkedIn a valuation of $9 billion. Although fluctuated, LinkedIn valuation remained well above the IPO valuation throughout the year.
LinkedIn’s market capitalization was steadily on the rise with a few fluctuations between 2012 and early 2015. However, it plunged in the first quarter of 2016 ending 31st March 2016. Earlier the previous month, LNKD share price experienced the sharpest drop soon after the company announced a weak revenue estimate for the full 2016. LinkedIn valuation then fell to the lowest, $15.1 billion, since the fourth quarter 2012 ending 31st December 2012. Following the plunge, Microsoft announced a $26.2 billion acquisition of LinkedIn on 13th June 2016. They completed the all-cash transaction on 8th December 2016.
Today, the professional networking platform has 810 million members. The platform remains the largest of its kind, adopting itself to today’s new economy. According to Microsoft Q2 2022 earnings announcement, LinkedIn revenue for Q2 2022 increased 37% year-over-year.