Microsoft Buying Skype
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!