The objective of this case is to help students critically evaluate the market value of LinkedIn's stock following its recent IPO. In the context of strong investor appetite for social media companies, LinkedIn is the lamp bearer among U.S. businesses in that business that are considering tapping into public marketplaces.
The case can serve to illustrate the predicaments of valuing an early-stage high-growth business with a great deal of uncertainty about fundamental value and prices that are quoted might reveal expectations that are difficult to justify. Irrespective of which valuation approach is applied (e.g., residual income, discounted cash flow, multiples), the instance provides a stage (i) to map the business's essential success and risk factors into forecasts and estimates for its future performance and cost of capital, and (ii) to critically assess the tacit assumptions underlying the market's expectations. The case is suitable for a course on business valuation at all levels (undergraduate, MBA, executive programs).
PUBLICATION DATE: October 18, 2011 PRODUCT #: 112006-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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