Not for the first time this year a social networking site has caused some gasps at massive valuations, leading to concerns of another internet bubble as LinkedIn’s share price doubled.
While social network behemoth Facebook was not so long ago valued at $50 billion, with many baulking at the valuation at the time, the smaller LinkedIn is now the subject of skyrocketing share prices which have seen the firm valued at a massive $9 billion.
The recent initial public offering from LinkedIn had priced shares at $45 a pop, which has now hit $86.60 when the firm started trading on the New York Stock Exchange.
The social and work networking site is said to have a fast growing membership base of more than 100 million subscribers and reaps in revenues from online advertising, premium subscriptions and hiring tools sold to recruiters.
However, there are concerns that the firm only raked in $15.4 million in 2010, and so will have to start growing very fast if it is going to live up to the expectations.
This has, according to the Wall Street Journal, led to fears that investors are buying into firms in a reckless way that is reminiscent of the dot com bubble a decade ago, and has raised concerns that we could be on our way to another.