What could be the primary driving factor behind the over $1 billion public offering?
Navi Mumbai, Maharashtra -- (SBWIRE) -- 09/06/2013 -- Mountain View, California headquartered LinkedIn announced on Sept 3rd that they plan to raise over a billion dollars through the public offering of their Class A common stock. The primary reason stated for the offering was to strengthen their ‘financial flexibility’. However, they also cite international expansion & potential acquisitions as another factor behind this decision.
LinkedIn has been performing extremely well recently reporting record revenues of $364 million, a 59% increase, as stated on their last earnings call.
At their Q2 results call, CEO Jeff Weiner pointed to new growth optimization efforts as the main reason for their 37% y-o-y cumulative membership growth to more than 238 million members. A large chunk of their members, more than 65%, are from outside the U.S. Later in the call, Steven Sordello, the CFO noted that CapEx had increased to 92 million, largely due to the purchase of equipment for their new data center.
In terms of APAC, he went on to state that “growth remained solid and we are seeing positive indications from efforts to strengthen sales management in both Australia and India”. On being asked about the strong LCS account additions in their Q&A session, CEO Jeff Weiner pointed to Southern Europe, South America, Brazil and notably India continuing to be strong.
Considering the above factors, all indications point to LinkedIn wanting to grow their O-U.S. member base from the current 65%. The $1 billion plus public offering tends to make sense, if they’re headed in this direction.
For the complete presentation by Jeff Weiner and CFO Steven Sordello at their Q2 call visit Earningsimpact.com.
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