LinkedIn reported another strong quarter doubling revenues from around $90 million in first quarter 2011 to $180 million for the first quarter 2012. The company also showed solid improvement in earnings going from $2.1 million in the first quarter last year to $5.0 million in the first quarter this year. The stock price is currently at $117 and the firm has a market value of over $12 billion. Better yet Facebook plans to go public in a couple of weeks which more than likely will create a nice wave for LinkedIn’s stock price to ride for quite sometime. LinkedIn’s management team has executed the perfect plan to maximize the value of their remaining pre-IPO shares. All they have to do is keep their performance up for another year or two and the inside rewards will be in the billions. The trick will be how to dump most of the shares prior to a social networking /media bubble pop. Of course I could be wrong and the social networking / media industry will live up to all the hype and continue growing to the successful heights of Google and Amazon.
The insiders at LinkedIn have been quietly and methodically selling off their inside shares during the eleven months post IPO. As I reported in my first post on this blog, LinkedIn insiders and executive team members had cashed in significant shares post IPO to lock in early gains. That trend continues. As you recall, LinkedIn (“The Company”) raised $248 million via the IPO to fill the company coffers. By the end of February 2012, the insiders including the executive team had already cashed in stock worth $350 million filling up their personal coffers. As of today, just two months later, that figure is up $100 million to $450 million.
The leader of the executive team and CEO, Jeff Weiner, has cashed in $59 million in the eleven months since the company’s IPO. David Henke, the SVP of Operations, has cashed in $24.7 million. Steven Sordello, the CFO, has cashed in $21.8 million. Dipchand Nishar, SVP Products / User Experience, has cashed in $16 million. Erika Rottenberg, VP General Council, has cashed in $10.9 million. Michael Gamson, SVP Global Sales, has cashed in $10.2 million. That is some nice change to supplement their salaries ranging from $250,000 to $480,000 excluding their annual bonus that will equal or surpass those annual salaries. The kicker is that there will be lots more inside shares to dump in the coming months or year. The founder and Chairman, Reid Hoffman, has sold only a small percentage of his shares pulling in merely $35 million. These folks are going to have one hell of a Christmas or Hanukkah. But, imagine how much richer they could have become had they held their shares well into the future when the company lives up to the expectations. Why cash out now when the future is so bright?