The Week That Went By (Sep 02 – Sep 06)

The week that went by saw a major acquisition of Nokia’s (NYSE: NOK) device business by Microsoft (NASDAQ: MSFT). The US software giant has decided to go big time into hardware and in an attempt to make a major inroad in the mobile devices business, the company bought out the already bleeding devices business of Nokia for a total acquisition price of $7.2 Billion. While the acquisition will substantially add to the revenues of Microsoft, the same cannot be said about its profitability. Also interesting, but still unclear, is what will Microsoft do with the feature phone portfolio of Nokia and how will it fit into Microsoft’s overall business. The acquired Nokia devices division has been bleeding losses in the last few quarters and Microsoft will need to change that quickly in order to maintain its current profitability levels. The MSFT stock price has fallen by over 6% since the acquisition was announced while the stock price of Nokia, contrastingly, has seen a whopping increase of over 37%.

Also significant was the announcement of LinkedIn Corp’s (NYSE: LNKD)  $1 billion follow on public offering coming at a time when the firm is improving earnings with every quarter. The funds will be used bythe firm to expand abroad. The issue also increases the probability of the firm going in for a strategic acquisition. The stock has seen an increase of 3% in the three days following the announcement.  Even as LinkedIn opened up speculation regarding an acquisition, Netflix (NASDAQ: NFLX) announced its intentions to go comical with the famous Canadian stand-up comedian Russell Peters. Under the agreement Netflix will stream a comedy special and also the comedian’s upcoming world tour in a four part comedy series entitled ‘Notorious world tour’, both of which will be available for Netflix users beginning October 14th.

Even as the Zillow (NASDAQ: Z) stock seemed to have become red hot and overpriced, a time seemingly perfect for booking profits, Australian billionaire James Packer displayed a bit of the contrarian streak. The billionaire’s firm Cavalane Holdings bought a 9.4% stake in Zillow Inc., becoming the second largest shareholder at Zillow. The move comes at a time the Zillow stock has gained over 240% in the year to date and at a price-to-sales ratio of 25 which is too high even for a growing firm.

The rejuvenated Yahoo Inc. (NASDAQ: YHOO), under Marissa Mayers, completed a turnaround of sorts which had been underway ever since Marissa joined the firm. The company officially announced its new logo on Sep 5th, completing 14 months under the leadership of Marissa Mayers, a period which saw the company on an aggressive streak completing close to twenty acquisitions and also makeovers to some of the Yahoo properties while some other properties like Yahoo China saw closure of services.

Facebook (NASDAQ: FB) once again found itself at the wrong end of a privacy controversy. The company paid out close to $20 million in settlements to users for unlawfully using their pictures and information in third party advertising.

To see Nokia’s latest stock price movement, click here (NYSE: NOK)

To see Microsoft’s latest stock price movement, click here (NASDAQ: MSFT)

To see LinkedIn’s latest stock price movement, click here (NYSE: LNKD)

To see Netflix’s latest stock price movement, click here (NASDAQ: NFLX)

To see Zillow’s latest stock price movement, click here (NASDAQ: Z)

To see Yahoo’s latest stock price movement, click here (NASDAQ: YHOO)

To see Facebook’s latest stock price movement, click here (NASDAQ: FB)

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Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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Comments on this article and LNKD stock

WW Evans
What is the negative impact to Microsoft's profitability margin due to Nokia acquisition? Would you have any idea about that?..
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