[FoRK] MS Skynet: Microsoft Buys Skype for $8.5B

Gregory Alan Bolcer greg at bolcer.org
Tue May 10 07:46:09 PDT 2011

On 5/10/2011 7:40 AM, Gregory Alan Bolcer wrote:
> What??? I must have been sleeping.
> Greg
Wait...okay.  They real story: MS buying the rest of the the shares in 
skype for $2.5B.

eBay bought Skype in October 2005 for up to $4.1 billion dollars

While the initial announced price for Skype was up to $4.1 billion, eBay 
paid about $2.6 billion for the company and another $530 million in 
earn-outs to the two founders. So in total it spent about $3.1 billion.

In November, eBay sold 70 percent of the company for $1.9 billion to 
various investors and the Skype co-founders. The company received about 
$2.5 billion from Microsoft for rest of its share of Skype. In total the 
company has received about $4.4 billion or just over 40 percent more 
than it paid.

When eBay bought Skype, its stock was $40 a share. Now whether it was 
because of disastrous management or Skype, eBay stock took a nosedive 
and has only recently started to recover. If it used the $3.13 billion 
to buy its own stock, eBay would have lost about 21 percent on the 
investment. Even buying S&P 500 Index funds would have resulted in about 
8 percent gain. (The S&P 500 was at 1,250 in Oct 05, and is at 1,346 
today, for a gain of about 8 percent over the period.)


greg at bolcer.org, http://bolcer.org, c: +1.714.928.5476

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