Profit Booking: LNKD Acquisition, SELL Recommendation!
Our 2 timer, LNKD jumped as much as 50% up, driven by an announcement that Microsoft reached a deal to acquire the social network for professionals for $26.2 billion!
I have received over 35 emails since morning to share my thoughts and how we may react, so here we go! While the 2 CEO's believe the acquisition will create new synergies and opportunities, including accelerating the growth of LinkedIn, Microsoft Office 365, and Dynamics, we believe it is time to press the trigger! Since the LNKD management agreed for a buyout at $196 per share, a good but not a spectacular price, it reflects their lack of confidence in the company's own ability to expand its gross margins and fuel growth beyond this point.
The possibility of a higher bid is very low. As a result, we are officially closing both our positions at a profit and are ready to move on. Consider this as a Double SELL RECOMMENDATION for LNKD. Congratulations! This is not the first time that our recommendation has gone through a profitable buyout, and won't be the last!