Social media, cloud computing and other such tech startups have been all the rage in the recent tech bubble. In May 2011, we had LinkedIn going public which went up 55 percent just on its first day of trading and has been going up ever since but it does have a large range for such a new company on the NYSE with a 52 week range of $55.98 - $122.70.
Then Groupon had the largest IPO since search engine giant Google by raising $700 million. What is more, even tech companies are reported to be hiring like crazy with smart people going to make careers in Silicon Valley rather than on Wall Street.
However, in this new tech bubble, tech companies are making use of private exchanges and other means to make money as the whole process of going public can take an average of nine years. For example, the creator of online social games such as poker, Zynga, made about $30.7 million before its IPO and Groupon made an amazing $688 million in revenues.
The biggest thing that has gotten everyone talking in terms of investment and IPOs this year is Facebook looking to go public. It’s a $5 billion IPO and it is the largest internet public offering in American history. Secondary exchanges are the cash cow for these tech giants and Facebook is already capitalizing on these private exchanges. Other familiar social media names such as Twitter, Foursquare and Yelp are also keenly trading on these secondary exchanges in a bid to launch their own IPOs.
This is great for private companies such as Facebook and LinkedIn to get revenues before going public and it also allows the elite investors to maximize their potential returns by getting in early.