LinkedIn share price more than doubles in NYSE debut (Reuters)

NEW YORK (Reuters) – LinkedIn Corp's shares more than doubled in their public trading debut on Thursday, evoking memories of the investor love affair with Internet stocks during the dot-com boom of the late 1990s.

Shares of the online professional social networking company closed at $94.25, 109 percent above their $45 initial public offering price. They rose as high as $121.97, in their first day of trading on the New York Stock Exchange.

Just two weeks ago, LinkedIn proposed a price range for the IPO that valued it at just over $3 billion. Less than a decade ago, the company was nothing more than an ambitious idea and a computer in one man's living room.

Now, its $8.9 billion market value makes it larger than Harley Davidson Inc, Moodys Corp and Chipotle Mexican Grill Inc.

"It seems to bring back memories of the tech bubble," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "Based on what I know it seems like investors are a little overly enthusiastic."

One hedge fund manager who flipped his holdings in the low-80's described how difficult it was to get shares. "I got 500 shares and was told to consider myself lucky," he said.

"There are billion-dollar institutions that are not getting any stock," he said, recounting something he learned from salesperson at one of the lead banks.

LinkedIn is the first prominent U.S. social networking company to publicly test how hungry investors are for social media companies such as Facebook, Groupon, Twitter and Zynga.

Such exuberant debut trading in recent years has been the prerogative of Chinese Internet stocks. LinkedIn shares marked the biggest first-day price jump since shares of Qihoo 360 Technology Co, China's third most-popular Internet company, rose 134 percent in their NYSE debut.

Like Facebook, Mountain View, California-based LinkedIn allows users to create profile pages displaying a picture and details about themselves.

While Facebook often has more informal profiles that may include a photo album from a recent trip, for example, LinkedIn is seen as the place for a professional persona. The profile pages are basically an online database of electronic resumes.

The company's 2010 net income was $3.4 million attributable to common stockholders on net revenue of $243.1 million.

As of March 31, LinkedIn had 1,288 employees and 102 million registered members. Based on LinkedIn's current market value, each of those users is valued at about $96.

MILLIONAIRES AND BILLIONAIRES, OH MY!

LinkedIn Chief Executive Jeff Weiner, a newly minted millionaire, shrugged off the trading craze or even worries that the pricing underestimated the appetite for the stock.

"Speaking for myself, personally I'm not even thinking twice about where the price is today and leaving money on the table or even anything remotely along those lines," he said, adding that the stock "will take care of itself."

He also cautioned against viewing LinkedIn as a proxy for other potential big-name IPOs, saying those stocks would also be driven by their fundamental value.

Weiner, who sold about 5 percent of his holdings in the offering, made $5.2 million on the IPO. Based on the latest stock price, his remaining stake in LinkedIn is worth about $208 million.

LinkedIn's co-founder and ex-PayPal executive Reid Hoffman made $5.2 million selling less than 1 percent of his shares. His remaining stake in the company -- 21.7 percent of the voting power -- is now worth about $1.8 billion.

The company raised $352.8 million on Wednesday by selling 8 percent of the company, or 7.84 million shares, for $45 apiece. The company increased its anticipated price range by $10 on Tuesday to $42 to $45 per share.

Bankers typically try to price an IPO so that the stock rises about 15 percent on the first day of trading -- enough to reward investors who made a bet, but not so much that the company and shareholders feel they could have made much more.

The company's shares were sold at about 17.5 times its 2010 sales. They are now worth 37 times the company's 2010 sales. By comparison, Google Inc's shares are valued at just under six times 2010 sales.

"There's a lot of enthusiasm and maybe there's excess demand because there is just not a whole lot of supply of these types of companies in the market. That can drive a richer valuation but it's not a bubble," said Scott Cutler, co-head of U.S. listings at NYSE.

Underwriters on the IPO were led by Morgan Stanley, Bank of America Merrill Lynch and JPMorgan.

(Reporting by Clare Baldwin and Alina Selyukh. Additional reporting by Edward Krudy, Rodrigo Campos, Angela Moon, Dan Wilchins, Chris Sanders, Caroline Valetkevitch and IFR's Stephen Lacey; Editing by Lisa Von Ahn, Maureen Bavdek and Robert MacMillan)

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GOP Medicare Plan Could Share Common Ground With 'Obamacare' Exchanges

Rep. Paul Ryan's budget proposal to overhaul Medicare already is being lambasted as an attack on seniors. 

But the basic details of the plan are not so far off from several other health care systems -- including the coverage provided to members of Congress, the Medicare Advantage program and the so-called health insurance exchanges established under the Democrats' federal health care system overhaul. 

Ryan, a Wisconsin Republican and chairman of the House Budget Committee, outlined the framework of his proposal on "Fox News Sunday." He said it would rely on the kind of "premium support" system outlined in an earlier proposal co-authored by him and former White House Budget Director Alice Rivlin -- meaning seniors would get a fixed subsidy from the government to help pay for premiums in the private health plan of their choosing. Ryan said Medicare would send the subsidies directly to the private plans, which would have to "compete against each other" for business. 

He compared the idea to Medicare Advantage, a Medicare offshoot which lets seniors put Medicare money toward private plans. But the framework also bares similarities to the exchanges in the federal health care overhaul. 

Both proposals presumably would put out a list of approved private health plans and subsidize the policies chosen by patients. 

Ryan, asked at an event last month about the common feature, said: "Exchange is not necessarily a dirty word." 

However, Ryan suggested the Republican idea of an exchange is much different from the Obama administration's idea. 

The differences may lie in implementation. Whereas the federal health care overhaul sets strict standards for the types of plans that would be allowed to compete for subsidized patients' business, the Center on Budget and Policy Priorities cautioned last month that the Ryan-Rivlin proposal "sets no specific benefit standards" for private plans. 

Conservatives, though, like the idea of a less-regulated exchange. 

John Goodman, president of the National Center for Policy Analysis, said he expects Ryan's plan to set some criteria. But he said that probably wouldn't be as strict as the federal exchanges, which he claimed would "virtually dictate" to insurance companies what they have to provide. 

"There's going to be choice in both worlds. ... That's similar," he said. "It's not radical. It's not even that new." 

But he praised Ryan's approach and suggested it be used as a model for the eventual exchanges under the health care overhaul. 

One key difference between the two exchanges is the way the subsidies are calculated. Under the Ryan-Rivlin proposal, the subsidy would be based on the average cost per Medicare patient in 2012 -- and then allowed to increase at the rate of GDP growth plus 1 percent. Under the health care overhaul, subsidies would be based on a calculation that factors in market prices and the income of the individual. 

There are other obvious differences. The health care overhaul uses Medicaid to cover very low-income individuals. And, of course, the Ryan-Rivlin plan deals with seniors, whereas the health care overhaul's exchanges are targeted at low- and middle-income individuals who generally are not covered by an employer. 

But as with the health care overhaul exchanges, Ryan suggested the GOP might be looking at a sliding scale for Medicare benefits. He told "Fox News Sunday" the proposal would give "more for the poor, more for people who get sick, and we don't give as much money to people who are wealthy." 

The Tax Policy Center, in an analysis put out last month, argued that the health care overhaul and the Ryan-Rivlin plan actually go hand-in-hand. The analysis said the federal overhaul lays the groundwork by instituting an individual mandate, setting up an exchange and establishing minimum standards for insurance plans. "Additional premium support for seniors would be the final piece of the puzzle," fellow Howard Gleckman wrote. "Seniors would be able to buy affordable private coverage through the same sort of exchanges as tens of millions of working people. ... The idea is not as radical as it sounds." 

He also compared the idea to Medicare Advantage and the plans offered to members of Congress, urging Democrats to stop defending the current "flawed" Medicare system and Republicans to let the federal health care overhaul go into effect -- so the two policies can complement each other. 

Though the exchange idea has been around, imposing such a change on Medicare would mark a stark departure from the current system, which provides government money straight to doctors and hospitals for senior care. 

The Ryan-Rivlin plan would call for seniors to pay more for smaller expenses but put a cap on what they could pay out-of-pocket. It's unclear whether the new GOP plan would have similar figures, but the Ryan-Rivlin proposal set a flat $600 deductible and capped total expenses at $6,000. 

Ryan stressed that the changes would not affect those 55 and older, but would keep the program solvent in the long-term. 

"Doing that saves Medicare," he said. 

Early criticism, though, has been fierce. 

Rep. Chris Van Hollen, D-Md., claimed Ryan was giving a pass to "taxpayer giveaways" to the oil-and-gas industry and other corporate interests at the expense of seniors. 

"This is a huge change in Medicare. Not only does it cut the amount for Medicare but it ends the current guarantee that seniors have under Medicare to certain health benefits. And it essentially transfers all the risk of rising health care costs over to the senior," Van Hollen told Fox News. "What he's doing is privatizing Medicare." 

A Congressional Budget Office study last November determined that seniors would likely either face higher premiums or less extensive coverage under the Ryan-Rivlin plan. 

Goodman said it's true that the Ryan-Rivlin plan would eventually make seniors pay more out of their own pocket. But he argued that it also provides more "flexibility" to the private sector to control costs.  

Mike Needham, CEO of Heritage Action for America, said the current system simply won't last. 

"What we have now is a Medicare system that's going bankrupt," he said. "The most important thing is saving Medicare for future generations."

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