Microsoft will pay $26.2 billion for LinkedIn, which represents a 50% premium on LinkedIn’s stock price at the time when the deal was announced. The price tag is also seven times LinkedIn’s 2016 revenue run rate, which is a very healthy valuation.
LinkedIn fell from its high of $262 per share in February 2015 mainly because growth rates were not at the level wanted by Wall Street. Wall Street’s expectations overshadowed the need for more aggressive paths to higher revenue growth.
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