
‘Scary’ reasons why LinkedIn sold to Microsoft - yuhong
http://www.recode.net/2016/6/13/11920416/linkedin-acquisition-microsoft-reasons
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nugget
LNKD stock was volatile which meant that share price crashes were great
opportunities to invest if you believed in the long-term dominance of the
company. I "loaded the boat" when it fell to $100/share. There's little doubt
in my mind it would have made it back to $196/share (which was about my
estimate for fair value) with or without MSFT, although it got there much
faster this way. Curiously the stock is trading about 3% below the all-cash
offer price so I guess that Wall Street believes there's a small but non-zero
chance the deal doesn't happen.

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panic
To save you a click, here are the three reasons:

LinkedIn’s stock was struggling.

LinkedIn’s ad business was slowing down.

LinkedIn’s growth was a concern.

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samfisher83
Linked in to me seems like myspace. It seems to be full of spam. Its interface
seems be still from the mid 2000s. I guess there was no facebook competitor
like there was to myspace so they seem to have won.

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rando18423
I had to download the LinkedIn newsfeed blocker it was getting so horrible.
Like 90s grandma chain emails horrible. And I work in energy finance /
investment banking / hedge funds.

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Finnucane
For whom are these reasons "scary"?

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smt88
Microsoft shareholders

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cpncrunch
I doubt if they are scared. MSFT had $105B cash and short-term investments at
the end of March. Worst case they'll just lose a quarter of their piggy bank.

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smt88
1) It's totally, completely ludicrous to suggest that billions of dollars are
a small amount of money to any existing company. Billions are peanuts to only
a handful of governments in the world.

2) I'm a MSFT shareholder, and I'm scared. I'm not at all scared that the
company will fail. I'm scared that my stock will be worth a lot less, and I
won't be able to liquidate it without losing a bunch of my money.

3) The "piggy bank" is the shareholder value. That's where we get our
dividends, and stocks have no value without dividends.

4) It doesn't matter what the effect of the purchase is on Microsoft, at least
not to a shareholder. The market decides what the stock is worth, and the
market thinks short-term and irrationally.

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cpncrunch
Even if the investment is completely written off, that is just 7% of the mkt
cap. It's not going to kill Microsoft. I think you should be more worried
about the woman who just won a judgement of $10k for being forced to upgrade
to win 10.

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pavel_lishin
> _since LinkedIn may now be able to sell ads alongside Microsoft Office’s
> suite of products that reach a lot more people than LinkedIn’s current user
> base._

And OpenOffice rejoiced.

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powertower
In what ways are those reasons "scary", and to whom are they scary?

Seems link LinkedIn got a good offer, and did not sell out of fear.

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ams6110
It's like trying to sell your house in 2009.

You know it used to be worth a lot more, and may be again someday, but it's
uncertain. You suddenly get an offer that's higher than the current market, so
you take it since you have no real confidence the market will be back to its
former levels in the next decade. Yes it's a good offer for the moment, but
there's still an element of fear/uncertainty driving the decision.

It's also potentially scary to Microsoft since they may have paid a price
that's well above anything the market will ever see again.

