LinkedIn was expensive going into the IPO. Coming out on the other side it simply got ridiculous.
Relevant operating metrics are trending up, but as you may have guessed… They are trending at a diminished pace. Growth is slowing, not quickening – which is what you will need to justify anything near this atmospheric price.
Subscribers can download valuation scenarios ran for LinkedIn using the most optimistic parameters even remotely possible - LinkedIn IPO valuation & comments. Included are the IPO details. We have factored in triple digit annual growth for the next few years with a cap on expenses; used a 500% social networking premium for relative valuation (although Monster Worldwide has a social component for a whole lot less), and the resultant valuations still came out showing a bubbled price simply dying to be burst. Professional and institutional subscribers may access the full model via online spreadsheet here.
Caution should be exercised in shorting this stock in that ~10% of common was floated and it is in high demand. A short squeeze may be imminent.