Why Linkedin Didnt Use An Auction & Why Their Bankers Didn't Screw-Up

I was trying REALLY hard to avoid getting involved here, but I’ve seen far too much naive speculation and finger-pointing that Linkedin’s bankers massively underpriced the issue and that they should have done an auction (“just like Google did in 2004!”).

If you haven’t already, read The Epicurean Dealmaker’s spot-on post about how IPO bookrunning and underwriting works for a firm like Linkedin.

Let me make this perfectly clear: Investment banks do not set the ultimate price for IPOs; the market does.

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Is Linkedin an Unemployment Trade?

Since we don’t have enough share data on Linkedin, seeing as it just IPO’d today and whatnot, I decided to use what some are calling a soon-to-be-comp, Monster Worldwide (MWW).  What’s the thesis, though?  Firms with a big headhunter/job-seeker component track unemployment rate?  Track the inverse?  Go fish?  Let’s take a look at what a decade of Monster’s monthly stock price looks like versus headline unemployment:

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Why Linkedin Sucks

I’m probably one of Linkedin’s ideal users/customers: I’m a white collar professional looking to expand my professional network, get a (better) job, and promote a growing website/business.  Yet I utterly and passionately despise Linkedin.  It clogs my inbox with reminders that someone with whom I already know and communicate wants to “connect” on the network.  I don’t need to connect with my real/former/quasi-friends on Linkedin, that’s what Facebook is for.  I’ve never had any semblance of success “networking” my way to a job or even interview using Linkedin, although I suppose that’s because I’m neither 1. in/looking for a sales job and 2. not a shameless “connection” whore; I understand the unspoken social contract that there’s a difference between reaching out and hustling for an interview, and annoying those very same people who have the position/influence to get me one.

I could keep going like this forever, but to make it a little more organized, let’s just run through a few of them, in no particular order.  If you can think of any that I missed, please post in the comments!

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