For Reid Hoffman, the chairman of LinkedIn, it took less than 30 minutes to earn himself an extra $200 million.
With the hours ticking down to his company's stock market debut, Mr. Hoffman dialed into a conference call from San Francisco's Ritz-Carlton hotel as his chief executive, Jeff Weiner, and a team of bankers raced up from Silicon Valley in a black S.U.V. to meet with potential investors.
Demand for shares was intense, and they decided to raise the offering price by $10, to around $45.
When trading began on May 19, LinkedIn did not open at $45. Or $55. Or $65. Instead, the first shares were snapped up for $83 each and soon soared past $100, showering a string of players with riches and signaling a gold rush that has not been seen since the giddy days of the tech frenzy a decade ago.
Now there are signs that a new technology bubble is inflating, this time centered on the narrow niche of social networking. Other tech offerings, like that of the Internet radio service Pandora last week, have struggled, and analysts have warned that overly optimistic investors could once again suffer huge losses.
That enthusiasm was on full display in the blockbuster debut of LinkedIn, which provides a window into how a small group -- bankers and lawyers, employees who get in on the ground floor, early investors -- is taking a hefty cut at each twist in the road from Silicon Valley start-up to Wall Street success story.
"The LinkedIn I.P.O. will be used very powerfully over the next year as these companies go public and bankers deal with Silicon Valley," said Peter Thiel, the president of Clarium Capital in San Francisco and an early investor in PayPal, LinkedIn and Facebook. "It sets things up for the other big deals."
The sharp run-up after the initial public offering set off a fierce debate among observers about whether the bankers had mispriced it and left billions on the table for their clients to pocket. But the pent-up demand for what was perceived as a hot technology stock set the stage for easy money to be made almost regardless of the offering price.
Naturally, Wall Street is enjoying a windfall. Technology I.P.O.'s have generated nearly $330 million this year in fees for the biggest banks and brokerages, nearly 10 times the haul for the same period last year, and the most since 2000.
Besides the $28.4 million in fees for LinkedIn's underwriting team, which was led by Morgan Stanley, Bank of America and JPMorgan Chase, there were also a few slices reserved for specialists like lawyers and accountants. Wilson Sonsini, the most powerful law firm in Silicon Valley, collected $1.5 million, while the accounting firm Deloitte & Touche earned $1.35 million.
Mr. Hoffman founded LinkedIn in March 2003 after making a fortune as an executive at PayPal, the online payments service, but even as LinkedIn grew and other employees and private backers got stakes, Mr. Hoffman retained 21.2 percent, giving him more than 19 million shares when it went public. He has kept nearly of all them, so for now his $858 million fortune -- it was $667 million before the last-minute price hike -- remains mostly on paper.
Mr. Weiner arrived more recently, in late 2008, after working at Yahoo and as an adviser to venture capital firms, but his welcome package included the right to buy 3.5 million shares at just $2.32. And they are not the only big winners who secured shares at levels far below the I.P.O. price.
For example, when LinkedIn raised cash in mid-2008, venture capital firms including Bessemer Venture Partners and Sequoia Capital, scooped up 6.6 million shares at $11.47 each in return for early financing. They have held on to the stock, but Goldman Sachs, which got 871,840 shares at $11.47, sold all of it for a one-day gain of nearly $30 million.
Scores of fortunate individuals also managed to profit.
Stephen Beitzel, a software engineer, worked at LinkedIn from its founding until March 2004, but kept his stock when he left. His shares are now worth $17 million, and he sold $1.3 million worth in the offering.
Mr. Beitzel, 43, said he planned to take a two-year sabbatical and practice his hobby, playing bagpipes, while his wife returns to graduate school. "I try not to think too hard about it," he said in an interview. "I made a lot of money, but it's a big crapshoot."
Back in mid-2003, Andrew Beebe provided some of LinkedIn's earliest start-up financing. "I put in much less than I could have and much less than I should have," said Mr. Beebe, a San Francisco sales and marketing executive who sold 3,000 shares in the I.P.O. that he had originally acquired for less than $5 each. "But I don't live in regret mode, and I'm a very happy investor."
The road to riches began in late 2010, when Mr. Hoffman, Mr. Weiner and their advisers made the decision to go public. They soon developed a game plan to closely control the offering.
As with the opening of a hot nightclub, it would be exclusive: only 9 percent of the company's shares would be issued. Of those shares, only 10 percent would be made available to individual investors, instead of the typical 15 percent.
Meanwhile, bigger institutions like Fidelity and T. Rowe Price would be favored over smaller ones, who might be more likely to flip shares for a quick buck. Over 500 institutional investors wanted the stock, but the 10 largest would get the largest share. And about one-third would not get any.
LinkedIn's top management closely monitored who got what, with Mr. Weiner using an iPad app created by Morgan Stanley to keep track of the process.
With few shares to trade, institutions reluctant to sell and plenty of retail demand, the stock opened at $83 and rose as high as $122.70 before finishing the day at $94.25.
Despite earning just over $15 million in 2010, LinkedIn had convinced the market it was worth nearly $9 billion.
That rarefied air proved fleeting. As of last Friday, the stock had dropped to $65.53, making the underwriters' prudent pricing look a bit wiser than it did initially.
Still, a few ordinary investors were agile enough to squeeze out a profit. Yves Duquella, a local banker and active investor in New York, bought 300 shares at $91 on the morning of the offering, and dumped them above $100 by noon.
"Some poor idiot bought it at $122 and never saw that again," he said. "It's the greater fool theory, like we saw in 2000, but I'm going to do the same thing with Groupon."
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