Great piece by Henry Blodget disclosing some of the underbelly of a multi-billion dollar IPO:
Of course, the truth about these and many other Wall Street "estimates" is that they usually aren't really "estimates" at all. They are low-balled, sandbagged "guidance" provided to analysts by the company, usually secretly. Everyone involved in an IPO--from the company that goes public, to the banks who take the company public, to the investors who buy the stock when the company goes public--wants the company to "beat expectations," so it's in everyone's interest to make the "expectations" as low as possible.
Henry goes on to speculate about what might be the real predictions on the street. It's interesting to understand how the IPO market works. Reading this article will give you some insights.
We now also know that investors have not just met the speculative $4.5 billion valuation - LinkedIn is currently valued at almost $9 billion.
