Why Are These Guys So Happy?
BECAUSE THEY'VE SOLD LINKEDIN TO MICROSOFT FOR MORE THAN TEN TIMES WHAT IT SEEMS TO ME TO BE WORTH...
I am not a financial expert, not even a run-of-the-mill financial or investment analyst. Nor am I a statistics whiz or genius quant. I am not even an accountant.
I'm just an ordinary small-business guy, who long ago stopped investing in stocks because I couldn't figure out how share prices bore any relation to the value of the companies involved.
Certainly not to hard assets, or to net worth, even if one allows net worth to include soft assets, like "good will", whatever that means. Nor, moreover, to any reasonable multiple of historically established net earnings or even gross revenues.
So, now I read that Microsoft is buying LinkedIn for $26.2 billion...
And being the financial yahoo that I am, I look at that amount, and it seems to me so way over the moon, that I have to ask what is it I am missing.
For example, I go to the revenue and profit stats for LinkedIn for the past five years. and this is what I find:
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About me, Phil Friedman: With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation. In a previous life, I taught logic and philosophy at university.
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