Sure, and IPO is essentially a sale of an unpriced piece of equity. Nobody knows really how much its worth but as with earlier funding rounds various techniques try to estimate the value going out the door. That value is the combination of "price per share" * "total outstanding shares" so the total value of the company.
The company registers to sell a certain number of shares, this is additive to the total number outstanding, so once you have what will be the new total, and what you think will be the value of the company, you divide value by total and that is your price per share.
Then you go out on a 'road show' where you talk to various other banks and other investors and you say "We think the company is worth between X0$ and X1$ for these reasons and that is a share price of between $Y0 and $Y1, would you be interested in buying shares?" and they may say "Not really." or "Sure we'd love to by n shares at $Y0 and maybe n1 (often less than n) shares if it was at the high end of $Y1"
Now at some point on this road show, if you're good and the company's prospects look great, you have people who have signed up to buy all your shares, even if it comes out at the higher price. That has validated your price point, now if you haven't even talked to half your prospects you might decide to raise the offering price or increase the number of shares, you go back and call the folks who committed before and make sure they are still on board.
Now you have a list of people who are willing to buy your stock, and then when the market opens you sell them that stock at the high end price, and collect your money.
Now those people (and the bank that is the 'market maker') for the stock may be willing to sell the stock for a premium over what they paid for it. Other investors who have read the S-1 but weren't part of the initial roadshow might say "I'd buy this stock even if it was 20% higher than that initial price." and they put in a buy order for it, someone says "Hey a quick 20%! I'm down!" and sells them the stock they bought at the IPO price from LNKD.
The price bounces around and then lands at a point where nobody else is willing to buy it for any more money than it is being offered at. Nominally the 'market' price for that company.
Now if people start buying the stock for any price because they just "want in on the action." as it were, then the price can rise above the price that is supported by the fundamentals of the company, and that is a speculative price rather than a market price. Stocks priced on speculation define a bubble.
So LNKD priced at $45 I think, they had more demand than they could meet, and the price has risen. Are speculators buying it? Hard to know yet but it seems like there is some speculation going on.
When a new issue is offered to the market, after it is priced but before it actually starts trading, all of the buyer and seller interest is consolidated to determine what price point would result in there being an equal amount of buying and selling. And that becomes the opening price.
The chart at google finance displays the price was $83 on 9:30 when the volume was 0. I can understand the price rising due to higher demand but not the discrepancy in google finance chart when the volume was 0.
that's where it opened. the $45 price is where stock was bought before it started trading publicly; once the stock opened on the nyse it first changed hands at $83.
