LinkedIn, whose IPO was the biggest for an Internet company since Googles… (Michael Nagle, Bloomberg )
Reporting from San Francisco — LinkedIn insiders are preparing to hit the sell button.
Executives and investors looking to realize gains in the stock since its blockbuster initial public offering in May plan to sell more than 6.7 million shares worth about $500 million, according to filings with the Securities and Exchange Commission.
One of LinkedIn's top investors, Bain Capital, is unloading its entire stake in the professional networking company. It holds more than 3.7 million shares, about 4% of LinkedIn's outstanding stock. Bain led a $53-million investing round in LinkedIn in 2008 that valued the company at more than $1 billion.
The sale will come next week after the 180-day "lockup" agreement following the company's IPO that expires Sunday. That agreement prevents insiders from rushing to sell their stakes in the company. It's common for investors to cash out after a lockup agreement.
LinkedIn, whose IPO was the biggest for an Internet company since Google's in 2004, said last month it would sell an additional $100 million in stock to fuel its growth. It said Tuesday that that sale would involve at least 1.3 million shares. It has not yet set a date for the sale.
That will at least double the number of shares available on the stock market. LinkedIn has benefited from the limited number of shares currently trading. Limiting the amount of shares sold in an IPO makes shares scarce and tends to inflate stock values.
Shares slid 4.6% to close at $74.86 on Tuesday. LinkedIn shares closed as high as $109.97 in July but fell to the low-$70 range in August.
Top executives including Chief Executive Jeff Weiner and Chief Financial Officer Steve Sordello are each selling 10% of their holdings. They agreed to a 90-day period in which they cannot sell more shares, the Mountain View, Calif., company said.
Chairman and company co-founder Reid Hoffman agreed to the condition but is not selling any shares. His stake in the company is worth more than $1 billion.
LinkedIn posted a loss in the third quarter — its first as a public company — as its revenue more than doubled. LinkedIn has ramped up spending to expand its offerings worldwide. The company has more than 135 million members.