LinkedIn 2012 Annual Report Download - page 40

our stockholders against our practices or our board members if they disagree with our positions. Finally,
because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the
Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in
any of a broad range of business combinations with any ‘‘interested’’ stockholder for a period of three
years following the date on which the stockholder became an ‘‘interested’’ stockholder.
If securities or industry analysts do not publish research or reports about our business, or publish negative
reports about our business, our share price and trading volume could decline.
The trading market for our Class A common stock depends, to some extent, on the research and
reports that securities or industry analysts publish about us or our business. We do not have any control
over these analysts. If one or more of the analysts who cover us downgrade our shares or change their
opinion of our shares, our share price would likely decline. If one or more of these analysts cease
coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial
markets, which could cause our share price or trading volume to decline.
The requirements of being a public company may strain our resources, divert management’s attention and affect
our ability to attract and retain qualified board members.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE
and other applicable securities rules and regulations. Compliance with these rules and regulations has
increased and will continue to increase our legal and financial compliance costs, make some activities
more difficult, time-consuming or costly, and increase demand on our systems and resources.
We have and will continue to consume management resources and incur significant expenses for
Section 404 compliance on an ongoing basis. In the event that our chief executive officer, chief financial
officer, or independent registered public accounting firm determines in the future that our internal control
over financial reporting is not effective as defined under Section 404, we could be subject to one or more
investigations or enforcement actions by state or federal regulatory agencies, stockholder lawsuits or other
adverse actions requiring us to incur defense costs, pay fines, settlements or judgments and causing
investor perceptions to be adversely affected and potentially resulting in a decline in the market price of
our stock.
In addition, changing laws, regulations and standards relating to corporate governance and public
disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs
and making some activities more time consuming. These laws, regulations and standards are subject to
varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in
practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could
result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing
revisions to disclosure and governance practices. We intend to invest resources to comply with evolving
laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management’s time and attention from revenue-generating activities to
compliance activities. If our efforts to comply with new laws, regulations and standards differ from the
activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory
authorities may initiate legal proceedings against us and our business may be harmed.
As a public company that is subject to these rules and regulations, we may find that it is more
expensive for us to obtain director and officer liability insurance, and we may be required to accept
reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it
more difficult for us to attract and retain qualified members of our board of directors and qualified
executive officers.
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