Yes, sometimes marriages can happen over social media in the corporate world. And there is one striking similarity in the emotion broadcasted after announcement of marriage plans and company buy-outs: overly optimistic. If you don't agree with me, watch the recent video of Jeff Weiner and Satya Nadella speak about what the take over means to each of their companies: https://youtu.be/HHVtNgngLHA.
Jeff is seen to be controlling his smirk (he recalls what happened to Nokia after Microsoft buy out), while Satya brags about the deal and how it buying Linked In would help Microsoft expand its business. And subsequently, Jeff defends the deal and explains why it is a win-win for Linked In; as Satya vehemently shakes his head like a joyous partner who slipped in the engagement ring. You know who is the husband in the marriage.
Though I've never been married or engaged in my personal life, but in my professional life, I've played the role of a communications specialist giving false hope to both parties. At one time, I was a part of the team that prepared optimistic communications assuaging fears of employees and customers during Satyam fiasco, and later on announcing an aquistioon to employees, compiling Q&A to customers and financial analysts who often sit on the fence questioning the value of the deal and success/failure of the acquisition strategy.
Over valued?
Microsoft is paying 79 times the social network's earnings before EBITDA and Linked In shares are being bought over at $220 despite Linked In shares dropping in value by 44% due to poor performance reported in Feb 2016 and losing $11 billion in market cap.
Today 26.2 billion deal is being questioned, analyzed and reviewed by press, analysts on business channels and shareholders on Twitter. Though we could hear the similar tune in the background: over valuation, but let's not forget that the rich always marries into rich and often the marriage is a way to consolidate wealth and safeguard personal prosperity more than ensuring prosperity for employees and shareholders. Linked In shares surged in value (46%) as soon as the deal was announced by Microsoft, which clearly shows the market pulse on the buy-out.
Raw deal
In my professional career, I have gone through the experience of both being taken over by a smaller player and taking over a smaller player. The truth is that, many of colleagues were made redundant and high cost resources being replaced with cheaper options from the other side bringing gloom to employees.
Just as kids get a raw deal in a marriage, employees get the other end of the stick in M&As. Euphoria and gratitude are both an illusion as management looks to multiply their wealth and reduce cost. The only parties that stands to gain in corporates marriages are lawyers, investment bankers, deal brokers and consulting companies (therapist) that work on post-merger integration.
:-) :-)
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