“Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.”- George SorosLast Thursday LinkedIn (“LNKD”) launched its initial public offering (“IPO”) on the New York Stock Exchange and received a roaring reception of jubilation and excitement. The IPO of the social networking website used for professional networking was priced at $45, so those select investors who received the stock allocation registered over a 100 percent gain in one day and turned the company's executives into billionaires.How does this compare to prior internet IPOs? Netscape Communications, for example, registered a 108 percent gain in its first day of trading. Yahoo had seen a 154 percent gain and eBay roared up 163 percent in its 1998 debut. Amazon only managed to gain a measly 31 percent in its opening day in 1997. So it would appear that the LNKD launch was similar to premiums received during the “dot-com bubble”.Let's take a step back and try and make sense of this. Is this a crazy IPO or is the market valuing this company appropriately? I will let you decide for yourself, dear reader. LNKD is an online professional networking site which derives the bulk of its revenue from recruitment services and job postings.This is a very different investment than Facebook which derives a large portion of its value from advertising. With a market capitalisation of nearly $9 billion, LNKD is now worth more than companies like JC Penny, US Steel, or even a similar competitor Monster Worldwide which boasts a market cap of only about $2 billion.Monster Worldwide has roughly two million job postings compared to LNKD's estimated 300,000. LNKD does not expect to make a profit this year and, as of Thursday's close, traded at more than 1,300 times its trailing 12-months earnings per share of $0.07 and 14.3 times trailing 12-month sales.Some structural and technical issues should be noted on this IPO. Only seven million shares were offered and this may have elicited a panic mentality with numerous investors given the scarcity of the issue. In fact it may be contributing to the initial froth we have witnessed.Furthermore, no one is shorting this stock and there are no put options. The options market won't be set-up for this stock until the week after the IPO.Holders and or potential buyers of LNKD may also want to look out east to see what recently happened in China. Renren, the Chinese version of Facebook, went public on May 4 at $14 per share. It subsequently rose rapidly on its initial listing to as high as $24, only to fall to $13.75 as of May 19.Note as well the history of Baidu.com, the Chinese Google. It registered a very impressive 354 percent gain on the day of its offering but subsequently tumbled 60 percent over the next six months.With persistent easy money policies that have been perpetuated by the Federal Reserve continuing for some time, many investors worry about new bubbles forming. A lot of investors have been waiting to identify this next bubble. Is it in commodities? Is it in the emerging markets?LNKD's successful launch may be a harbinger for other mainstream social networking giants soon to come public like Facebook, Twitter, and Group On. In fact, I think that I may have found the next potential bubble: social networking.