The Wall Street chatter about Silicon Valley these days is all about the companies that don't seem to want to go public--Facebook, Groupon--and instead are raising massive rounds of funding that permit extensive and far more shadowy private-market trading. But, according to Reuters, one Valley company may indeed go public soon: professional networking site LinkedIn, which the Thursday story says has already picked a bank to underwrite an IPO.
The only comment from LinkedIn is that "an IPO is just one of many tactics that we could consider." One of the first social-media sites to claim a profitable balance sheet, LinkedIn makes money from premium services as well as from advertising that runs at notably high prices due to the site's white-collar membership ranks (who number about 85 million).
But one of Reuters' sources hinted that LinkedIn may push for an IPO due to pressure: If Facebook goes public, it could be such a massive event on Wall Street that it would be capable of undermining another, subsequent social-networking IPO with the sheer force of its hype. The same story also implied that social gaming company Zynga may be considering an IPO before Facebook for that reason.
Of course, Facebook investors have said that they don't want the company to go public this year at all. But the U.S. Securities and Exchange Commission (SEC) is reportedly scrutinizing the company's heavy amount of private-market trading out of a suspicion that Facebook may, in fact, have more than 499 individual shareholders--something that would require it to disclose its tightly-held financials. This has only gotten more tense due to Facebook's recent $500 million funding round led by Goldman Sachs, in which the investment bank invited wealthy clients to buy into it and was swamped with demand within days.
Should the SEC turn up the heat, a Facebook IPO could come sooner rather than later--which may be why LinkedIn could hit fast-forward as well.