![]() ![]() However, some analysts say the acquisition might be worth the price when considering how it could modernize Microsoft’s enterprise software offerings. Shares of LinkedIn skyrocketed 47% to $192.99 on Monday after the deal was announced, while Microsoft’s fell 1.8% to $50.55, pushing them down nearly 5% over the last three months. The deal represents a purchase price of $196 a share, which is 29% below LinkedIn’s all-time high of $276 reached on Feb. Shares are down 10% on the year, unable to fully recover from a sharp selloff in February that was triggered by weak earnings guidance. “We believe Microsoft may have overpaid for a decelerating business with negative GAAP margins,” said Macquarie Research analyst Sarah Hindlian, in a note to clients. Read: Nokia joins 6 other big Microsoft fails Microsoft wrote down its $6.3 billion aQuantive deal in July 2012. Microsoft “has never done well with large M&A,” said UBS analyst Brent Thill in a note to clients. The purchase price represents a multiple of roughly eight times LinkedIn’s Microsoft bought the Nokia business for $7.2 billion in 2013, but admitted it made a mistake and wrote down the acquisition last summer for $7.6 billion. Roger Kay, founder of tech consulting company Endpoint Technologies Associates, said he believes Microsoft might end up writing this down like it did with Nokia’s phone business. This deal marks the sixth largest technology-industry acquisition ever, according to Dealogic. “This is about the next phase of growth for Microsoft,” Nadella said Monday morning on CNBC.īut some analysts wonder whether Microsoft overpaid. ![]()
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