The speculation that the giant, and hugely profitable, business network is planning to make a major acquisition began moments after it announced it was planning to sell $1 billion worth of stock.
In a filing this afternoon with the Securities and Exchange Commission, LinkedIn said it intended to use the money from the sale
…primarily for general corporate purposes, including working capital, further expansion of our product development and field sales organizations, international expansion, general administrative matters and for capital expenditures, including infrastructure. In addition, we may use a portion of the proceeds from this offering for strategic acquisitions of, or investments in, complementary businesses, technologies or other assets.
The company prefaced those comments declaring “The principal purposes of this offering are to increase our financial flexibility and to further strengthen our balance sheet.” However, with $873 million in cash and short-term investments, LinkedIn’s balance sheet is already plenty strong, which is what’s fueling the speculation that the company has its eye on an acquisition, or possibly more than one.
Last year, LinkedIn bought SlideShare for $119 million and then in April this year it bought the mobile content platform and news reader Pulse for $90 million.
In a note about the SEC filing, investment site SeekingAlpha wondered aloud about the use of the $1 billion, asking, “Is the company looking to make a big acquisition?”
A company spokeswoman declined to comment on the announcement or the speculation.
Following the announcement, shares of LinkedIn fell $5.13 to $241.70 in after-hours trading. The billion sale would increase the number of shares by 3% or 4,165,972 at Friday’s closing price of $240.04.