The deal combines Microsoft, which dominates the global market for computer systems, with LinkedIn, known as the main social network for professionals. Microsoft wants to use LinkedIn as a database of professional information and distribution channel for its software systems. LinkedIn gains additional financing and access to millions of people who could potentially join its network.
Together, the two companies could build new types of services that would be particularly useful for workers in sales and HR roles, according to Rodney Nelson, lead Microsoft analyst at Morningstar. A sales rep could look up someone he's pitching to through Outlook and see their LinkedIn information while writing an email pitch.
In the future, Microsoft might even deploy Cortana as a virtual assistant to write the email too, based on that LinkedIn data. The big question here is, where would Salesforce fit into that equation if Google wanted to build a full stack customer acquisition and sales tool? LinkedIn may be a professional network, with a growing user base, but it also represents one of the top methods to connect for potential business deals that also happens to be great for recruiting.
Oracle: With LinkedIn, they would have access to a full stack of sales, customer acquisition and talent management solutions. Without delving too deep into the strategy, merger arbitrage involves buying the stocks of to-be-acquired companies to collect that minute gap when the buyout deal closes.
This is something of an oversimplification of the strategy -- merger arbitrage often involves hedging out certain risks and adding leverage to magnify returns. The strategy has been demonstrated to be uncorrelated to the broader stock market, and it has been used to create immense profits for its investors.
Returning to the case of LinkedIn, the risk-return profile appears quite favorable for a few reasons. Both companies have repeatedly said they expect the deal to close by the end of the year -- so in less than two months.
Assuming the end-of closing date remains intact, this means investors will realize about a 3. As I said, the deal seems likely to close, but individual investors need to make this judgment call for themselves. Either way, Microsoft's LinkedIn buyout offers the opportunity to highlight a little-discussed investing scenario and examine the school of investing that aims to profit from these instances.
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Cost basis and return based on previous market day close. Investing Best Accounts. Stock Market Basics. Stock Market. LinkedIn also has a vast archive of original, shareable content which could easily be used to drive up SEO hits and further increase its user base. It also has a lot of potential when it comes to customer retention — while Facebook, Twitter, Instagram and Snapchat each appeal to particular age groups; LinkedIn is for everyone.
But in the meantime, the volatility continues.
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