LinkedIn Corporation (LNKD) Makes Its Biggest Acquisition Ever, Buys for $1.5 Billion

Post by:

LinkedIn Corporation (LNKD) is an online network for professionals with over 300 million users in countries around the world. The company’s stock is currently trading around $250 in a 52 week range of $136.02-$276.18. The stock has been relatively strong this year with shares rallying more than 9% year to date. The stock is little changed today despite the announcement the firm would be undertaking its largest acquisition ever.

LNKD announced that they will be acquiring online education company for cash and stock in a deal valued at $1.5 billion. This acquisition should add revenue growth to LNKD as is a profitable company. offers its customer’s web based access to learning programs on a wide number of topics. The company sells these services via a subscription based model but also offers larger enterprise solutions to larger private and government organizations.

There are clear synergies between the two companies as LNKD will now be able to direct users to educational courses that will help them develop the skills needed for specific jobs. With more and more money flowing into the online education space how can a trader use options to bet on further growth for LNKD on the back of this acquisition? LNKD is a high priced stock so a trader would have to invest a large amount of capital to own the underlying stock. However, they can use a stock replacement strategy to replicate the P/L profile of the stock while only investing a fraction of the capital.

Trade: Buying the LNKD Aug 220 Calls for $41.00
Risk: $4100 per 1 lot
Reward: Unlimited
Breakeven: $261.00

This gives a trader a breakeven higher than the stock’s current price but with these calls trading with a 75 delta they will behave very much like the underlying stock.

Andrew Keene

Submit a Comment

Your email address will not be published. Required fields are marked *



Join our VIP Notification Service and Be Among The First To Know About All The Latest Trade Ideas, Trading Tips, Highly Profit Potential Trades, and Market Predictions From Our Team of Expert Traders!
Join Text Messaging List
By providing your mobile phone number and clicking on the above button, you agree to receive automated promotional messages from us. By opting into our SMS Program, you agree to our Terms and Conditions and Privacy Policy  
You have to agree on terms in order to proceed to the subscription.


Get Our Free Daily Trading Videos

Delivered To your Inbox

By submitting your information you agree to our Terms of Service and our Privacy Policy