Bain Capital was an earlier investor in social business network LinkedIn and now the private equity firm is preparing to sell off their 3.7 million shares, an amount equal to $275 million at today’s stock price.
That investment is equal to approximately 4.3% of LinkedIn’s outstanding stock. Bain began investing in LinkedIn during a 2008 funding round that brought the company $53 million.
Bain Capital isn’t the only investor pulling the plug in LinkedIN, three other investors have also announced plans to pull out including German software giant SAP, LinkedIn co-founder Allen Blue and LinkedIn head of international business Arvind Rajan who will sell a combined total of 2.5 million shares, equal to $225 million.
The move to sell stock comes after the company’s 180 day “lock-up” which ends on November 20. LinkedIn launched their IPO on May 19.
While 6.2 million shares will be sold the social network will also place 1.3 million new shares on the market, shares valued at a combined total of $100 million. LinkedIn will use the money they raise to help develop new products, sell services and acquire new company’s for technology advancement purposes.
The 6.2 million shares being offered are all “Class B” shares which offer 10 votes per share compared to Class A stock which offers 1 vote per share, however once resold the stock will be reclassified as “Class A.”
The sell off comes at a time when LinkedIn shares have more than doubled in value since their initial offering despite only a small increase in company profits in 2010.
Do you think LinkedIn is still a good investment?