Microsoft Buying Facebook For $50B??

After parsing a speech by Microsoft CEO Steve Ballmer, and deciphering other tea leaves, Facebook focused blog AllFacebook.com speculated in a post yesterday that Microsoft was preparing a $50 billion bid for Facebook. ¬†While I personally believe it would be a strategically brilliant move, I think the stock market would puke all over it, as there is little Wall Street appreciation for the game changing impact that Facebook is having across the media and technology landscape. ¬†With Microsoft trading at less than 16.5X trailing earnings, and Facebook poised to generate just several hundred million in profit in 2011, a Facebook acquisition would be so dilutive to Microsoft’s earnings, that it is unfathomable that any CEO would take the near term impact to reputation and share price to execute on such a dilutive transaction, regardless of how visionary it could be perceived in the long run.

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One Response to Microsoft Buying Facebook For $50B??

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