19 May 2011

Who made the "Big Bucks" out of LinkedIn's IPO

Reid Hoffman
Bank of America and Morgan Stanley sold LinkedIn stock to their best institutional clients at $45 a share last night.  The value of LinkedIn could not have grown by 90% in the past 12 hours, meaning that LinkedIn sold its stock way too cheaply. It also means that the institutional investors who bought LinkedIn's stock last night are celebrating their instantaneous 90% gain. By underpricing the stock, Morgan Stanley and Bank Of America gave their best institutional clients a gift of at least $175 million this morning. And that money came right out of LinkedIn's pockets and the pockets of the LinkedIn shareholders who sold on the deal.

Jeff Weiner

LinkedIn's founder Reid Hoffman could have made the double as well as for CEO Jeff Weiner who sold some of his stock for $45 a share last night. He could have sold it for $90 this morning.

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