After two years, Microsoft still hasn’t delivered on its grand vision for LinkedIn. And it may never do so.
Every time this LinkedIn commercial pops up on YouTube I am reminded of how low the company has fallen to.
High school standard slides, accompanied by stock music purchased from Shutterstock.
How did a company like this managed to sell itself for US$27 billion — at a 50% premium over its last traded share price!
Dumb-ass buyer? Nope, it was Microsoft, under Satya Nadella’s leadership as CEO.
Nadella is credited with turning around Microsoft, after Steve Ballmer’s US$7.9 billion mistake buying Nokia back in September 2013. (The money was pretty much written off by Microsoft in July 2015.)
But did Nadella make the same mistake with LinkedIn, except it would be 3.4x bigger?
A classic case of turning a loser into a winner… for one person.
The only clear winner in the whole deal is Reid Hoffman, the founder and Chairman of LinkedIn.
Just four months before the acquisition, LinkedIn’s share price plunged 44% in one day after the company announced a bad quarter and lowered forecasts.
Hoffman lost over a billion dollars in his net worth, which was about one third of his wealth then.
Fast forward to June 13, 2016, LinkedIn announced a merger deal with Microsoft. The stock price shot up by nearly 50%.
Hoffman’s net worth went back up by US$800 million.
Four months after the merger was completed Hoffman also joined Microsoft’s Board.
