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Apple Agitated, Dell Deal Done: Tech Weekly

Stocks in this article: AAPL DELL MSFT LNKD ZNGA

Dell (DELL), whose CEO Michael Dell once famously said that Apple should shut down its business and return the cash to shareholders, has done almost that. After a period of intense rumor and speculation, the No.3 PC maker has decided to go private.

A team led by Dell himself, along with Silver Lake Partners, is acquiring the company in a $24.4 billion deal. Under the terms of the transaction, shareholders will be paid $13.65 per share in cash, a premium of 25% to the company's closing price on Jan. 11, when rumors of the deal emerged.

The deal is being financed through a combination of cash and equity from Michael Dell, cash from investment funds affiliated with Silver Lake, cash invested by Michael Dell's investment firm, MSD Capital, and a $2 billion loan from Microsoft (MSFT). Dell will also roll over existing debt, and receive new debt financing from a consortium of banks.

Dell Dude, You're Getting a Joke of a Premium

A number of Dell shareholders are unhappy with the low offer price, including Dell's largest independent shareholder, Southeastern Asset Management. The fund says that Dell's worth $24 a share, a price far higher than the one currently being offered. Dell has a 45 day "go-shop period," in which it will solicit outside bids, but none are expected to materialize.

TheStreet ran a poll, with 87% of respondents described the premium as a "joke."

Shares of Dell closed the week flat at $13.63.


Earnings were also at the forefront this week, with names such as LinkedIn (LNKD), Yelp (YELP) and Zynga (ZNGA) reporting results.

LinkedIn saw fourth-quarter revenue jump 81% year-over-year, coming in at $303.6 million. That allowed LinkedIn to earn 35 cents a share. Analysts polled by Thomson Reuters were looking for 19 cents a share on $279.52 million in sales. Revenue growth was aided by Talent Solutions revenue, which totaled $161 million, up 90% year-over-year. Talent Solutions revenue made up 53% of this quarter's sales.

Mountain View, Calif.-based LinkedIn also surpassed the 200 million member milestone, ending the year with approximately 202 million members, up 39% year-over-year.

LinkedIn provided first-quarter guidance that blew past Wall Street estimates. It expects revenue between $305 million and $310 million. Analysts polled by Thomson Reuters were expecting $301.3 million in revenue. For the full year, LinkedIn expects sales between $1.41 billion and $1.44 billion. Wall Street analysts expect $1.439 billion.

Shares of LinkedIn soared this week, tacking on 21.53% to finish at $150.48.


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