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Microsoft (MSFT) Buys LinkedIn (LNKD) for $26.2 Billion
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Monday, June 13, 2016
Software giant Microsoft (MSFT - Free Report) has bought LinkedIn ahead of the market opening this morning. The reported all-cash deal (including LinkedIn’s cash on hand) is for $196 per share, or $26.2 billion. Prior to the deal, LinkedIn’s market cap was only around $15.5 billion, so this is a significant increase. LinkedIn shares are up 48 percent this morning, whereas Microsoft shares were temporarily halted as of 8:25am ET.
Microsoft has been interested in building out its enterprise business, and purchasing the “Facebook of business” would seem to fall in line with this. It also gives Microsoft a significant presence in the social media market, and we expect synergies in Microsoft’s app buildouts to help jump-start these efforts.
The questions for LinkedIn had always been whether its business model would be able to get over the hump and accelerate gains in enterprise-oriented social media and cloud-based services. There had appeared to be a plateau the company had reached over the past few quarters. By the same token, it’s been awhile since Microsoft blew the doors off a quarterly earnings report, as well.
Time will tell if this deal will trigger other cloud/social media service companies to be purchased (at a good premium) by firms known for its hardware and software, etc. For now, the Microsoft/LinkedIn deal appears to be accepted favorably by analysts in real time, even though MSFT shares are trading down slightly since the trading halt has been lifted.
Elsewhere, following a market selloff in the U.S. late last week, a combination of global concerns are keeping futures in the red to start this week. Both the Shanghai and Nikkei markets fell more than 3 percent overnight, as risk aversion among investors in Asia continues.
We also are wary of upcoming announcements from Fed Chair Janet Yellen this Wednesday, and the big Brexit decision expected next week. Chances of the Fed raising interest rates this month are nil at this point, with a July raise looking less and less likely. But the vote whether Great Britain will exit the European Union is far less certain.
Mark Vickery Senior Editor
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Microsoft (MSFT) Buys LinkedIn (LNKD) for $26.2 Billion
Monday, June 13, 2016
Software giant Microsoft (MSFT - Free Report) has bought LinkedIn ahead of the market opening this morning. The reported all-cash deal (including LinkedIn’s cash on hand) is for $196 per share, or $26.2 billion. Prior to the deal, LinkedIn’s market cap was only around $15.5 billion, so this is a significant increase. LinkedIn shares are up 48 percent this morning, whereas Microsoft shares were temporarily halted as of 8:25am ET.
Microsoft has been interested in building out its enterprise business, and purchasing the “Facebook of business” would seem to fall in line with this. It also gives Microsoft a significant presence in the social media market, and we expect synergies in Microsoft’s app buildouts to help jump-start these efforts.
The questions for LinkedIn had always been whether its business model would be able to get over the hump and accelerate gains in enterprise-oriented social media and cloud-based services. There had appeared to be a plateau the company had reached over the past few quarters. By the same token, it’s been awhile since Microsoft blew the doors off a quarterly earnings report, as well.
Time will tell if this deal will trigger other cloud/social media service companies to be purchased (at a good premium) by firms known for its hardware and software, etc. For now, the Microsoft/LinkedIn deal appears to be accepted favorably by analysts in real time, even though MSFT shares are trading down slightly since the trading halt has been lifted.
Elsewhere, following a market selloff in the U.S. late last week, a combination of global concerns are keeping futures in the red to start this week. Both the Shanghai and Nikkei markets fell more than 3 percent overnight, as risk aversion among investors in Asia continues.
We also are wary of upcoming announcements from Fed Chair Janet Yellen this Wednesday, and the big Brexit decision expected next week. Chances of the Fed raising interest rates this month are nil at this point, with a July raise looking less and less likely. But the vote whether Great Britain will exit the European Union is far less certain.
Mark Vickery
Senior Editor