The Buckingham

Social media have for quite some time been a part of our daily lives, whether professionally or personally. Now, these companies are going public, and they can be a part of our finances as well. With the success of LinkedIn’s recent IPO (an IPO is, in short, the first opportunity for the public to buy stock in a company that was previously privately-owned), a strong precedent has been set for future IPOs for Facebook, Twitter, etc. LinkedIn, a social media tool for professionals, is a successful concept and business. On the much anticipated first day of trading, LinkedIn’s stock rose from its initial point of $45 to as high as $93.

LinkedIn’s IPO is significant news on a number of fronts. For one, many people consider this to be the biggest public offering since Google, which went public in 2004. Second, it is the first domino to fall in a series of public offerings of even bigger social media and/or internet-based entities in the years to come, eventually leading to the ubiquitous Facebook itself. This type of excitement has been relatively absent from Wall Street ever since the bursting of the tech bubble approximately one decade ago, and with such high-profile companies as Facebook, Twitter, Groupon et al looking to go public, it’s easy to see why that is the case. On the other hand, it will be interesting to note how enduring this era of social media investment will be: will it be the Tech Bubble circa 2000 Redux? That remains to be seen, but, for now, LinkedIn’s early returns indicate even larger figures for more prominent and widely used private companies looking to go public.