Tomahawk, WI 9/05/2013 (BasicsMedia) – LinkedIn Corp (NYSE:LNKD), a career networking website is setting up plans to offer its Class A stocks worth 1 billion after experiencing quadrupled growth in value since 2011 when it offered shares at $45 per share. LinkedIn also intends to offer its underwriters an option of buying back an additional $150 million of its Class A common stock. Immediately after the news, LinkedIn shares went down by 2.3% at $240.25. LinkedIn which has approximately $900 million in cash and short term securities has not specified when the offering will take place.

LinkedIn has continued to grow over the years as it is considered as Facebook, for professionals thereby enjoying considerable expansion in circulation. This has also made its stocks values steadily increase with time. LinkedIn has grown since the launch in May 2003 to a membership roster of 250 million with a quarter residing in the U.S. What is quite interesting is that LinkedIn’s current stock offering is more than double its initial IPO offering. LinkedIn founded by Reid Hoffman with its team members being drawn from companies such as PayPal and Social net.

LinkedIn intends to use this move to increase its financial flexibility to be able to strengthen its balance sheet. The proceeds from this stock offering will be used for corporate purposes such as boosting the working capital, product development expansion, and other general administrative matters including capital expenditures and infrastructure. The proceeds from the stock may also be used for potential strategic acquisition of profitable complementary businesses technologies and other assets.

LinkedIn which is a Mountain View, Calif based company also intends to use the proceeds to increase the scope of its products and services to engage users beyond landing a new job. Some of the funds from the $1 billion stock offer will be used for international expansion to secure more users in countries that have been categorized as emerging economies. Mr. Kerry Rice a Needham and Co. analyst suggest LinkedIn should use the proceeds on powering data analytics  as such kind of investments would help LinkedIn sustain its aggressive growth rate.

LinkedIn intends to use J.P. Morgan securities LLC and Morgan Stanley & Co. LLC as the leading book running managers for the proposed offering. According to reliable sources LinkedIn filed an effective registration statement relating to the securities on the 3rd of September with the Securities and Exchange Commission. The offering will be made by means of effective shelf registration statement that will include final and preliminary prospectus.

If the offering goes on as proposed LinkedIn stands to sell roughly 4.2 million shares thereby giving LinkedIn roughly 116 million shares outstanding of Class A and Class B stock. Analyst put the move on LinkedIn as an attempt of trying to capitalize on the market currents enthusiasm on its stock. In Nov. 2011 LinkedIn relatively sold a minimal amount of 1.3 million shares which was about $263 million in cash and equivalent cash on hand. LinkedIn has only taken $103 million of investment since Nov. 2011 having moved to levels of profitability over the years.

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