Somewhere in the middle of the bull market the first common-stock flotations make their appearance. These are priced not unattractively, and some large profits are made by the buyers of the early issues. As the market rise continues, this brand of financing grows more frequent; the quality of the companies becomes steadily poorer; the prices asked and obtained verge on the exorbitant. One fairly dependable sign of the approaching end of a bull swing is the fact that new common stocks of small and nondescript companies are offered at prices somewhat higher than the current level for many medium-sized companies with a long market history.
—
Benjamin Graham in The Intelligent Investor
So LinkedIn went public today and it popped up over 100% reaching around $10B market cap. Forget P/E. Thats over 40x last years revenues.
The thing is that I’d have to consider Linked In one of the better companies that could go public. Just think about the flood of shit that will likely be headed our way in the coming months.
