LinkedIn IPO story updated with late-afternoon trading price.

NEW YORK (

TheStreet

) --

LinkedIn

(LNKD)

shares soared more than 126% to $102 in late afternoon trading Thursday, as investors clamored for a piece of one of the first social networking firms to hit the public markets.

Shares of the business-oriented social network opened at $83 -- double what it was priced at late Wednesday -- on its first day of trading on the NYSE. LinkedIn sold 7.8 million shares, or 8% of the company, netting it $351 million.

The company priced its shares at $45, the high end of its expected range. It's now valued at nearly $10 billion -- far above the $2.5 billion it commanded in the secondary markets just a few weeks ago.

While some tech watchers are hoping that LinkedIn's public offering will open the floodgates for a series of splashy tech IPOs including those of highly-valued social upstarts like

Facebook

and

Zynga

, it's more likely that today's offering will instead

act as an important barometer

of investor enthusiasm for Web 2.0 firms, helping other pre-IPO Internet companies gauge their worth in the public markets.

"Facebook and

Groupon

are definitely interested in following this," said Wesley Paul, a partner at Michelman & Robinson who works in the firm's corporate and securities department.

Given the scarcity of tech IPOs due to a

variety of factors

including lessons learned during the dot-com bust, LinkedIn's IPO represents somewhat of a turning point for the tech sector. The Web 2.0 firm has already commanded lots of early-stage investor interest.

Shares of LinkedIn were trading at $12 as of July 2009 on secondary market

SharesPost,

and crept up to $31 as of March. The firm raised the expected price range of its IPO by 30% on Tuesday in response to a surge in investor demand, to $42 to $45 a share, up from $32 to $35 a share.

While LinkedIn is profitable -- it posted $15 million in profit on sales of $243 million last year -- Francis Gaskins, president of IPO Desktop,

pointed out a couple things

in the firm's filing that investors should note. Due to investments in R&D, sales and marketing that the firm plans to make this year, LinkedIn actually expects to lose money over the next few quarters.

"It's very odd for an IPO -- especially one that's in demand -- to be able to come and do that," Gaskins told

TheStreet

.

Tech skeptics also caution that like shares of recently-public tech firms

Renren

(RENN) - Get Report

and

Demand Media

(DMD)

, LinkedIn's stock may come crashing down to the earth in the next few weeks despite the early hype. The share price of Renren, the so-called Facebook of China, soared almost 30% after its IPO earlier this month before dropping below its offering price a few weeks later.

"All of these companies are subject to the laws of physics, so long-term, companies will be valued on the basis of earnings," said Tim Keating, president of Keating Investments, which makes investments in pre-IPO companies. "While it's encouraging to see this high valuation for LinkedIn,

the company is going to have to justify it."

--Written by Olivia Oran in New York.

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