NEW YORK (TheStreet) -- Shares of LinkedIn (LNKD) are spiking by 48.31% to $194.40 in pre-market trading on Monday, as Microsoft (MSFT) has offered to acquire the business-oriented social networking service in a transaction valued at $26.2 billion.

Microsoft stock is down 3.26% to $49.80 in pre-market trading.

The Redmond, WA-based technology giant intends to purchase LinkedIn for $196 per share in cash, representing a 50% premium to Friday's closing price of $131.08.

Microsoft expects that the deal will reduce per-share earnings by about 1% for the remainder of fiscal 2017.

Jeff Weiner will remain CEO of LinkedIn and report to Microsoft CEO Satya Nadella. The deal is expected to close by the end of this calendar year, subject to approval by regulators and LinkedIn's shareholders.

"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn's network, now gives us a chance to also change the way the world works," Weiner said in a statement.

Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D+.

LinkedIn's weaknesses include its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: LNKD

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.