Microsoft Has the Last Laugh After 'Wasting' $26 Billion on Company It Bought in 2016
Microsoft took some flack for making its largest purchase at the time, but the move has paid off for the tech giant.
Microsoft (MSFT) - Get Free Report took a lot of fire for a controversial purchase on this a few years ago, but seven years later the tech company has been massively rewarded for its gamble.
Microsoft paid $26 billion for job posting social media platform LinkedIn in 2016. At the time it was the largest purchase the company ever made, and many in the finance community were questioning the wisdom of such a purchase.
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But very few are questioning the move now as LinkedIn's user base has grown by more than 100%, as pointed on on Twitter by Bloomberg's Jon Erlichman.
Erlichman points out that Microsoft paid a near 50% premium to "beat out rivals such as Salesforce, Facebook and Alphabet" each of whom seemed like more natural fits for the social media platform.
But since the purchase, LinkedIn has seen its user base balloon from 433 million people to 930 million, making it one of the largest social media platforms in the world.
And the increased user base has also bolstered the company's bottom line.
At the time, TheStreet loved the deal.
Founder Jim Cramer made multiple videos proclaiming his love of the purchase and one staffer said that the purchase would "likely have long-term benefit" for the company.
"At first glance, the deal seems overpriced. The purchase works out to roughly $196 per share of a company that has been floundering in the low $100s," journalist Kat McKerrow wrote at the time.
But she also noted that the purchase would "make Microsoft's service attractive as the war among virtual assistants and smart gadgets, an increasingly important part of technology geared to help individuals, heats up.
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