If you follow business news, then you know social business networking site LinkedIn went public yesterday. Its stock started at $45 per share and immediately skyrocketed to prices of more than double. This morning, it's trading above $100 per share. When this sort of thing happens, it's usually interpreted as great news for a company; after all, investors are very interested. In fact, this really means that the IPO was seriously mispriced by the bankers who structured it.

Henry Blodget from Business Insider explained yesterday:

LinkedIn's stock is trading above $80 a share this morning. Bank of America and Morgan Stanley sold the same stock to their best institutional clients at $45 a share last night. The value of LinkedIn-the-company, it seems safe to say, has not appreciated by 90%+ in the past 12 hours. And that means that, on its underwriters' advice, LinkedIn sold its stock too cheap. It also means that the institutional investors who bought LinkedIn's stock last night are high-fiving each other this morning, celebrating their instantaneous 90% gain. (Lots of them are probably also dumping some stock).

By underpricing the stock, Morgan and BOFA gave their best institutional clients a gift of at least $175 million. And that money came out of LinkedIn's pockets and the pockets of the LinkedIn shareholders who sold on the deal.

Of course, since he wrote this, the prices gone even higher. At $100, that gift increases in size to $275 million. These are proceeds that LinkedIn loses out on. So while it might celebrate its share price, their offering came at a pretty huge cost -- probably around $300 million.

Read the full story at Business Insider.