Most big cap tech stocks seem a bit richly valued by classical measures.

I'd love to see more discussion on the acquisition valuation here.

Considering that Github had sales of around 200M last year and is losing money, the 7.9B is a pretty rich multiple.

Sure Github is a nice fit for Microsoft (more perhaps than something like Minecraft is).

Still, this seems more like mindshare or perhaps defensive purchase.

Agreed - definite 'strategic' rationale for the purchase. Can't get there by any conventional valuation method. But to put things another way, do you believe that having Github as a Microsoft property (or the insurance that buys) is worth 1% of the company? Not too hard to get to big numbers when we're talking about a 3/4 trillion dollar company.

This one kind of feels like Skype, in that it felt like they overpaid there as well (I remember thinking that Silverlake had performed a masterful coup with Skype) ... only time will tell whether Github loses their mojo as in the Skype situation. I'm not a skype user, but my general sense is that the service has been completely eclipsed by everything else in that space.

They are using previously allocated $30 billion share buyback to repurchase the shares from the open market.

So they are still planning to purchase more shares than this $7.5B issue.

https://seekingalpha.com/article/4179322-github-deal-fits-ne...

Yes, it's true they have a stock buyback plan, so net-net it will be a wash. But the marginal decision remains the same - should we pay cash or shares for Github? If they really felt their shares were undervalued, why not just pay cash?

Stock buyback plans are heavily pre-meditated programs with relatively rigid rules. It's not like they added an extra ~8B to the last buyback plan in anticipation of this exact event.