It is true that existing shareholders might not price the round fairly if they have ulterior motives on the pricing.
However, frequently insider funding rounds are at realistic valuations, or even unrealisticly low valuations, to force all existing shareholders to participate or be diluted.
Your question is fairly meaningless. There are many different ways to value something, but one of the more reliable ones is "what are people willing to pay for it?"
By that valuation method, then yes, LinkedIn is really worth that much. By other valuation methods, probably not.
I guess what I mean is whether people that have followed them over time or are regular users, is that valuation really justified. I guess the investors could be looking to make a fairly quick profit if the do have an IPO.
