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Microsoft Buying Skype

10 May 2011 15 Comments

Tech bubble 2.0 baby. I’ve been watching Microsoft for some time. I actually want to own the stock because of it’s massive cash generating businesses and incredible bullet proof balance sheet.  With the lack of growth prospects however, you really have to enter the stock at an attractive entry point.  I’m seeking under $20 / share for an entry point.

In the news today is that Microsoft is buying Skype for $8.5 billion.  They definitely overpaid for the company based on Skype’s fundamentals, but it’s impossible to put a number on the possibilities that Microsoft could use with Skype, so it’s hard to go crazy over the price tag on the deal.

I think there are some interesting features that could utilize Skype.  Embedded in future versions of Windows and Office could be sort of interesting.  Office is the #1 productivity suite and being able to Skype other users would enhance productivity.

What I also like about the deal is that Microsoft used off-shore capital to buy an off-shore company.  Good use of overseas funds potentially.

I’ll be watching Microsoft and update you on whether or not I enter the stock.  Currently, I have no position.  Patience!

15 Comments »

  • 20smoney said:

    Update: I'm actually liking this deal more and more as I think about it. I'm definitely in the minority with that statement, and maybe that is part of the reason I like it?

    I think Skype offers some interesting capabilities for Microsoft and is more about a legitimate business need (communication) versus some quick consumer fad.

    I want to buy MSFT under $23/share.

  • bdphotoshoptutorial said:

    it is really a good news as ms are going to have skype! but my concern is it is really needed to ms of purchase skype!

  • fxgeorges said:

    I have a feeling they plan on linking this on future products, perhaps their next gaming console in the near future. The possibilities are endless with skype.

  • updawazoo said:

    don't worry, they'll find a way to start charging for something is free and trying to recoupe what they've over paid

  • Rob said:

    I am inclined to agree with fxgeorges92p Microsoft have definitely got something in mind for the skype network, but the question is what? i think gaming console is thinking to small

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