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LinkedIn shares plunge after strong IPO

LinkedIn Corp.'s shares suffered their first major setback Monday as investors began reassessing the lofty appraisal that the online networking company received in its recent initial public offering.
The company's stock price sank by as much 10 percent in early trading before rebounding slightly. As of early afternoon, LinkedIn shares were down $7.74, or 8.3 percent, to $85.35.
It could be just the start of wild rollercoaster ride that could last for several months.
The ups and downs are likely to be driven by a debate over how much LinkedIn is really worth after rabid investor demand caused its shares to more than double in their stock market debut last week. The rapid run-up left LinkedIn with a market value of about $9 billion, or about 18 times its projected revenue of about $500 million this year -- a far higher multiple than far more profitable and better-established Internet companies. For instance, Internet search leader Google Inc. trades at about five times its projected revenue this year.
LinkedIn appealed to Wall Street because its IPO provided the biggest opportunity so far to invest in the online networking craze that is consuming a bigger chunk of people's time, a trend that in turn is attracting more advertising.