Analysts have mixed reviews relating to software company's largest deal till date
after its acquisition by Microsoft Corporation. The software giant announced the acquisition on Monday after which the social network’s shares shot up. But, now the analysts have lowered the shares rating and put them at “Neutral” or the equivalent.has been downgraded by several analysts
The latest acquisition has been the largest deal made by Microsoft to datesum of $26 billion indicates that the Redmond, Washington firm intends to buy the Mountain View, . firm for $196 per share. According to the analysts, that’s the threshold for the social network firm and they’ve set the price target at or close to $196.
Last week, analyst fromCapital Markets Mark upgraded Californian social network to “Outperform” while setting the price target at $160. Later, this week, following the surprising acquisition of the company he modified the price target and took it at $196 the offer price simultaneously downgrading the stock to “Sector Perform.”
Overall,is quite optimistic in relation to the deal and has been speculating impressive synergies in the areas of Marketing and Sales. He also highlighted that the deal terms reflect pre-February’s valuation.
In the similar fan Heath Terry and teamfrom Goldman Sachs the previous price target of $162 to $203 and downgraded the stock rating to “Neutral.” They also moved the social network up in their ratings for mergers and acquisitions.
Amidst all the optimism, there are several analysts which are wary of Microsoft’s decision at such exorbitant price. This pessimism cannot be passed as the software giant had recently had worst experience in the field relating toacquisition. The company had to waive a major chunk off its to reflect the loss.
Post the announcement, Walter, an analyst from has been quite bearish on the software company. He has maintained a “Sell” rating for the stock while placing the stock at a price target of $36. Mr. has speculated that most of the revenue for the software giant will be coming from its core products and Office 365 instead of social selling. Although he agrees with the integration of social network in selling its product however he believes that the price paid for such strategic rationale is too high. According to him, experience of three years is a bit pre mature for him to form an opinion relating to Mr. ideology behind this acquisition. In the past, the management of the software titan had only opted for acquisition when it had found itself “stuck in a tough place strategically.”
In the strong competitive market, Microsoft ought to come up with solid strategies which can help it strengthen its bottom line. For, the acquisition is very fruitful but the software firm had had bad experience with regards to acquisition.
Mr.and Jeff could transform their methodologies into reality then the largest acquisition of Microsoft can guarantee strong and bolstering revenue figures for Washington based organization.