LinkedIn's share price more than doubled during its IPO debut. (Photo Credit: CC BY/Mario Sundar/Flickr)

Share prices during the IPO of online social network LinkedIn’s stock soared into the stratosphere this week, reports the Wall Street Journal. This has set many Wall Street brokers on edge as concerns over a new tech bubble surface. The prices are so high that brokers are advising investors to short LinkedIn stock, as a massive decline is anticipated.

LinkedIn numbers reminiscent of late-1990s dot com bubble

Reports indicate that LinkedIn’s stock ramped up 109 percent Thursday and completed the first day of trading at $94.25 per share, reflecting a $9 billion market capitalization that was 592 times above actual earnings. The price continued to rise Friday.

“Even if you think (LinkedIn is) a great business model, the feeling is that the valuation is way beyond what even the most bullish guys were hoping for,” said youDevise Ltd. Short-term trading analyst Timothy Murphy.

How a LinkedIn short sell works

In order to short sell LinkedIn stock, investors “borrow” the stock, then sell it in a bet that the share price will fall and that they can then buy shares back and return them to the lender. A fee in the form of an annualized percentage of the stock’s value is what investors pay for borrowing.

Ultimately, the only way investors will profit from short sales of LinkedIn stock is if the value drops severely. According to head of equities and derivatives Jonathan Bensimon of Société Générale in New York, betting on the fall of LinkedIn is a pretty big gamble.

“It’s going to be a tough game and a dangerous game,” Bensimon said to the WSJ. “Even if someone thinks it is valued way too high, he should think twice before shorting the stock.”

This is not your father’s dot-com bust

Over each of the past 12 months, LinkedIn has made about 7 cents per share, reports the Washington Post. Yet this week’s IPO explosion was an entirely different animal. The Economist notes that related social media and tech companies like Facebook and Twitter were estimated to be worth $76 billion and $7.7 billion pre-IPO, respectively. Groupon, Zynga and Rovio aren’t far behind.

Should the bubble burst

Valuing companies at more than what time-tested giants like Boeing and Ford are currently worth without proven, long-term business plans in place is reminiscent of a dot com bubble, but the difference now, according to The Economist, is that there’s a global dimension to the latest tech company awakening that the late-1990s bubble did not possess.

Many of the companies in question originated outside the U.S., such as Skype (Estonia) and “Angry Birds” creator Rovio (Finland). As a result, some experts believe the new tech bubble is more secure in its diversity. But if the bubble does pop, the spillover effect that dragged down the entire stock market in the late-1990s dot com bust won’t be there this time.

Sources

The Economist

Wall Street Journal

Washington Post

Wikipedia entry for short selling

Newly minted billionaire Reid Hoffman of LinkedIn

Coupons can be great -- Groupon combines coupons with group discounts. Image: Flickr/barganbri

Combine the best parts of a social network and couponing, and you’ve got Groupon. Part social network, part deal-of-the-day website, Groupon is a way to save some money. Groupon currently serves 40 U.S. cities, with a sister site in Europe. Groupon isn’t the only way to save money with a group, though.

How Groupon works

A “groupon” deal is, in essence, a bulk discount. If a certain number of people sign up for the deal of the day, then everyone gets the discount. If not enough people sign up, then nobody gets the discount. Retailers can treat these like group discounts, and there isn’t much risk. Groupon works because everyone agrees to buy whatever product or service is being offered for that day.

Where you can find a Groupon

There are 40 U.S. “markets” that currently have working Groupon deals. In Europe, MyCityDeal is the “sister” deal to Groupon that works the exact same. Over the next few years, MyCityDeal is going to be entirely merged with Groupon.

Not in a Groupon city?

Groupon is a great service that can help you find a lot of great deals. If you are not lucky enough to be in one of the 40 major citites where Groupon operates, though, you can still get good deals. There are websites similar to Groupon that operate in other cities. If you do not live in a major urban center, deals from Groupon or other websites don’t prove very useful. Try typing “group coupon” with your city in a search engine. Or check with your friends; they may already be set up.

Create your own Groupon

If you want to create your own Groupon situation, then it can be done. Groupon operates on a simple principle — group discounts. If you have something you’d love to get a group discount on, then call the vendor. Find out how many people they’d need to offer a group discount, then go to work. Use your social networks and friends to find out who else might be interested. Once you’ve hit the threshold, buy away!

Networking is an essential part of being human. You never know who you might meet – or who might need personal loans for new transistors! (Photo: Wikipedia.org)

In most any business, networking usually helps secure money now. Think of it as a personal loan. Be a friend to others and they’ll be a friend to you. The music industry thrives on the connections made between old colleagues, business associates and bosses. The sports, publishing, science, movie and fashion industries all require networking for everything to run as smoothly as possible to create entertainment for you, and in other cases, legal solutions you wish to solve.

Be Friendly

You want to try and always make friends with people who are around you. If there is someone who is sitting next to you or standing at the bar beside you, spark up conversation and chat with them. If you happen to know the person who you are around, solidify the relationship that you have and keep your energy bubbling. Of course, you don’t want to come across as too excited, but be willing to talk with people, because that’s how networking and developing contacts begins. If you aren’t sitting next to someone at any given event or during a monthly visit to pay a bill, get next to someone who you would like to meet.

Become an Early Bird

Arriving early gives you the opportunity to greet people and develop closer relationships. Besides, who feels liked when they rush into a meeting seconds before it begins? Get yourself a cup of coffee or bottle of water, relax and temporarily turn your job title into that of a host. Also, staying later is much tougher for people, since they usually have to run out immediately after the meeting, so get in good by getting in early.

Meet New People Through People You Already Know

If it isn’t much trouble, ask one of the people you know to introduce you to new people they are currently speaking with. The more people you know, the more chances you have at any possible thing in the world. When people remember you, they tend to provide you with opportunities that they come across. “I thought of you when I saw…” How many times have we heard that expression from friends and associates? If you are someone who doesn’t like to meet new people, you will risk losing out on experiencing different places, ideas and people.

Use Down Time Effectively

Some people might say, “You can’t get money now by sitting down.” However, for networking purposes, down time can be used effectively. While going to the bathroom, many of my friends – some of whom are top networking businesspeople – have scored new clients via phone. Another one of my friends landed a high five-figure deal while on break at a coffee shop. Every possible moment can be used to network and connect to new people who can provide new business.

You Must Give in Order to Get

You have to give people a reason, other than your own passion for your business, to contact you. Just handing someone a business card isn’t enough, especially in a day and age when people can obtain mostly anything that they want quickly. Sadly, it takes more effort to get someone’s attention. A smile and dazzling personality are great icebreakers, but they alone can’t do the job, unless you use those “gifts” well.

Networking doesn’t have to become a nine-to-five job for you. You can network while walking your dog, or while mailing envelops at your local post office. Just keep in mind, like personal loans, networking can get you money now!

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