KEY POINTS
- MSFT TO ACQUIRE LNKD: MSFT announced this morning that it will be acquiring LNKD at $196/share. The price is somewhat of a surprise since the takeout price is below where LNKD was trading at the beginning of the year. Timing is the bigger surprise since LNKD theoretically could have potentially fetched a higher price if it could have revived its stock by proving to the street that its long-term prospects weren’t nearly as bad its initial 2016 guide. The fact that LNKD is willing to sell now essentially suggests the opposite, or maybe mgmt didn’t want to risk remaining a stand-alone public company into a potential hiring slowdown and/or recession; the latter we haven't seen its public history.
- CRM WARS: MSFT may seem like an odd fit as a suitor, but we suspect the motivation comes down the CRM space (Client Relationship Management), where MSFT, CRM, ORCL & SAP are competing head on. What LNKD provides to the CRM space is its database of user-generated professional profiles, which likely can't be replicated at comparable scale. The key differentiator is that LNKD’s content is created/maintained by the professionals themselves rather than the other CRM tools that require the client to create/maintain the record themselves. From that perspective, what LNKD provides is a CRM user database that is likely more current and requires much less manual labor on the part of the CRM client.
- ACQUISITION CALL AT 11:45ET: More details to follow after the event.
Let us know if you have any questions or would like to discuss further.