Monday, June 13, 2016

So someone pulled the trigger on a purchase of a social media firm. Microsoft announced a deal to acquire Linked IN this morning for $26.2 billion.

Here are some initial data on the purchase:

Purchase Price $26.2 Billion

Per Share (based on 2015 End of Year diluted shares out): $203.06

What did Microsoft buy in terms of fundamentals?

Linked in ROE = -3.72%

Adjusted ROE = -11.7%

Return on Net Operating Assets = 24.8%

Return From Leverage = -15.2%

Return from Other = -21.3%

A hefty price to pay no doubt, but at least the operations are profitable.

** All metrics were run using Calcbench tools. The percentages were developed using the calcbench excel add-in, along with a valuation model that we have developed.


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