The purpose of this event is to help students to critically evaluate the market value of the shares of recent IPO of LinkedIn. In the context of a strong investor appetite for social media companies, LinkedIn is the bearer of light by U.S. companies in this sector who plan to take advantage of the public markets. The case can be used to illustrate the challenges of valuing a company with strong growth in the early stages with great uncertainty about the fundamental value and how prices may reflect expectations that are difficult to justify. Whatever valuation method used (for example, residual income, cash flows, multiple), which provides a platform (i) the key card for business success and risk factors in forecasts and estimates of future performance and the cost of capital and (ii) to critically evaluate the assumptions underlying the market expectations. The case is best suited for a course on the valuation of the company at all levels (undergraduate, MBA, executive programs).
Source: Harvard Business School
Release Date: October 18, 2011. Prod #: 112006-PDF-ENG
LinkedIn Corporation Case Solution