May 27, 2011 6:00 AM

Dealmaker of the Week: Katharine Martin of Wilson Sonsini

Posted by Tom Huddleston Jr.

 

DEALMAKER

Katharine Martin, 48, corporate partner in the Palo Alto office of Wilson Sonsini Goodrich & Rosati. 

THE DEAL

LinkedIn's initial public offering, which was announced last Wednesday at a price of $45 a share. The stock more than doubled during its first day of trading.

THE CLIENT

LinkedIn, the Mountain View, Calif.-based company is the world's largest online professional network with more than 100 million members. 

THE DETAILS

The company's initial offering was expected to raise more than $405 million and value the network at north of $4 billion. Instead, shares soared to a high-price of $122 in the company's first day of trading, for a market value of more than $8 billion, according to The New York Times. The stock closed at $86.37 on Thursday, May 26.

THE BIG PICTURE

The initial valuation of LinkedIn was seen as a positive sign for the company, but the offering's success fueled speculation that there will be more Internet IPO's coming down the pike--particularly Facebook's, which is expected within the year. The Times noted that the IPO was the largest by a U.S. Internet company since Google's in 2004 ($2.7 billion) and it is feeding buzz about possible lofty valuations for companies like Groupon, Twitter, and Zynga. "It's not 1999, but the big Internet IPO is back," the Times says.

"There's a lot of great companies out there looking to go public over the next . . . 12 to 18 to 24 months, and certainly a successful IPO by LinkedIn will probably provide them with some optimism about the chances that they have," Martin says.

Meanwhile, others see the offering's surprising success as cause for concern, with Forbes among those raising the possibility of another Internet bubble. And The Wall Street Journal predicts that share prices will eventually come back down to earth for a company that it says has slowing revenue growth and no projected profit in 2011.

THE BACKSTORY

The Am Law Daily reported on Wilson Sonsini's role advising LinkedIn on the offering when the initial registration papers were filed with the SEC back in January. The firm did some work for LinkedIn prior to last year, but not much, Martin says, and they won out in a competitive process to advise on the offering. "We were doing a very small amount of work before 2010, but I would say in the middle of 2010 and toward later in the year our role on corporate matters for the company started to increase," she says.

The firm has connections to LinkedIn's in-house legal team. Corporate counsel Lora Bloom is a former Wilson Sonsini associate. And the company's general counsel, Erika Rottenberg, used to be the top in-house lawyer at Sumtotal Systems, Inc., and used Martin as the company's outside counsel for more than four years before she joined LinkedIn in 2008, Martin says. 

ON CLOSING

An SEC filing from last Tuesday revealed that LinkedIn estimated its legal fees and expenses in relation to the offering at $1.5 million. By way of comparison, online content and domain name registration services provider Demand Media spent $2.6 million on legal fees in January when it raised $151 million through an IPO, but Beijing-based online video company Youku.com racked up only $300,000 in legal expenses on its $200 million IPO a month earlier. Chinese social networking company Renren, which is that country's answer to Facebook, spent $2.5 million in legal fees on an IPO that earlier this month raised $740 million.

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