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.
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: