Back to the future: Is social media overvalued?

27th May 2011

They face the choice between the old world and its safe bet stocks and the sparkly, exhilarating social media revolution – but are there any undervalued stocks out there worth taking a punt on?

Recent news showed that there are certainly plenty of options. Linkedin's IPO upped the ante when it comes to social media flotations, as the company more than doubled in value over its first day's trading with shares soaring from $45 to a high of over $120, before settling at $94.

At the end of the day the firm was worth a staggering $9bn – making it the biggest flotation since Google in 2004.

Henry Blodget, a well-known internet analyst during the dotcom bubble, told The Daily Telegraph  LinkedIn's Initial Public Offering had been drastically undervalued at $45 per share – deliberately.

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