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LinkedIn whips out begging cap, asks for $500m

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LinkedIn is looking for a few million dollars more from the market so it can increase its capital and its public float.

The social business network wants to raise the funds with a secondary offering of around $100m worth of its own shares, with another $400m or so coming in from stocks sold by existing holders.

"The proceeds of the primary portion of the offering will be used to provide additional working capital for LinkedIn, including further expansion of its product development and field sales organisations, for capital expenditures and potential strategic acquisitions or investments," LinkedIn said in a canned statement.

LinkedIn, which went public in May, has had a fairly tumultuous time on the open market so far. Its shares, initially priced at $45, soared on debut to $94.25, fell back to under $64 in June and soared again to $109 in July before settling to a more-than-respectable value of between $85 and $92 in the last three months.

The web company has just released its financial results for the third quarter of this year, featuring a net loss of $1.6m, despite revenues that had increased 126 per cent to $139.5m.

LinkedIn makes its money from its premium user subscriptions and from helping companies on the network hire staff and market themselves.

Its hiring solutions made the lion's share of its revenues in the three months ending in September, bagging $70.9m, while marketing solutions earned $40m and subscriptions made $28.4m.

LinkedIn said it was predicting revenue in the fourth quarter of between $154m and $158m and full-year revenue to be $508m to $512m, but it didn't make any predictions on its net income or loss for these periods.

The networking firm preferred, as companies often do, to concentrate its expectations on adjusted EBITDA, an accounting term that basically means earnings before taxes, interest payments on loans or the reduction in the value of its assets. By that metric, the firm actually made $24.7m in the third quarter instead of losing $1.6m.

LinkedIn is forecasting adjusted EBITDA of $19m to $21m next quarter and $83m to $85m for the full year. ®

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