Post by mangomoney on Jun 14, 2016 14:22:02 GMT 7
LinkedIn's Fear Sale
By Shira Ovide
LinkedIn CEO Jeff Weiner must have fielded constant phone calls from big tech companies eager to buy his company whenever he was ready. The fact that Weiner and other LinkedIn backers said yes this time is telling about the changing state of mind in once-confident corners of the tech world.Microsoft said on Monday that it had struck the biggest acquisition in its 41-year history by agreeing to buy LinkedIn for $26.2 billion, or $196 a share. That's nearly 50 percent higher than LinkedIn's share price on Friday, or more than 26 times LinkedIn's estimated earnings before interest, taxes, depreciation and amortization. LinkedIn shareholders can cheer the deep pockets at Microsoft, which has more than $105 billion in cash and short-term investments and a CEO who is ready and willing to do huge acquisitions.
A SALE TO THE RESCUE
But while LinkedIn is receiving a big premium from its share price before the weekend, Microsoft is paying about 28 percent less than LinkedIn's all time stock high of nearly $271 in early 2015. Back then, LinkedIn was trading at more than 11 times its expected revenue for the year, according to data compiled by Bloomberg. On Friday, LinkedIn was trading at less than five times its expected revenue for 2016, Bloomberg data show.
more...
www.bloomberg.com/gadfly/articles/2016-06-13/nothing-like-some-fear-to-stimulate-linkedin-sale-to-microsoft
By Shira Ovide
LinkedIn CEO Jeff Weiner must have fielded constant phone calls from big tech companies eager to buy his company whenever he was ready. The fact that Weiner and other LinkedIn backers said yes this time is telling about the changing state of mind in once-confident corners of the tech world.Microsoft said on Monday that it had struck the biggest acquisition in its 41-year history by agreeing to buy LinkedIn for $26.2 billion, or $196 a share. That's nearly 50 percent higher than LinkedIn's share price on Friday, or more than 26 times LinkedIn's estimated earnings before interest, taxes, depreciation and amortization. LinkedIn shareholders can cheer the deep pockets at Microsoft, which has more than $105 billion in cash and short-term investments and a CEO who is ready and willing to do huge acquisitions.
A SALE TO THE RESCUE
But while LinkedIn is receiving a big premium from its share price before the weekend, Microsoft is paying about 28 percent less than LinkedIn's all time stock high of nearly $271 in early 2015. Back then, LinkedIn was trading at more than 11 times its expected revenue for the year, according to data compiled by Bloomberg. On Friday, LinkedIn was trading at less than five times its expected revenue for 2016, Bloomberg data show.
more...
www.bloomberg.com/gadfly/articles/2016-06-13/nothing-like-some-fear-to-stimulate-linkedin-sale-to-microsoft
