Investors also have downside protection, stemming from Salesforce’s interest in acquiring LNKD. The enterprise software company has made no secret that it covets LinkedIn above all other acquisition targets, lobbying both LinkedIn and regulators in repeated attempts to thwart the deal. Now that they’ve passed on buying Twitter, Salesforce would presumably be waiting in the wings were MSFT’s acquisition to fall through. And even in the worst case scenario, where the MSFT deal is blocked by regulators and then Salesforce chooses not to pursue LinkedIn, investors have yet another layer of protection in the form of LinkedIn’s viable—albeit overvalued—business.

Despite LNKD’s huge stock option expenses, a management team that flouts GAAP accounting, nonexistent profits, and a poor M&A track record, Microsoft is confident that they can harvest enough “mobile enterprise big data social graph cloud synergies” to make their largest ever acquisition pay off. And while it’s hard to argue that LinkedIn was a compelling investment prior to Microsoft’s takeover offer, the merits of the business are of little consequence in this scenario. All that really matters—at least for LNKD shareholders—is if the deal will close by December; and it seems very likely it will.

No deal is guaranteed until the ink is dry, but there has been no evidence the EU will try to block MSFT’s acquisition of LNKD for $196/share. Investors can now scoop up LNKD for a 3% discount to MSFT’s offer, which is not commensurate to the risk of the deal falling apart, nor the downside protection afforded by Salesforce and LNKD’s operating business. This has created a compelling and straightforward opportunity for investors to earn 12%.

UPDATE [11/22/16]

Less than a month later, I sold my position in LinkedIn at $193.90 for a 2.9% gain over my $188.53 entry price—equivalent to ~35% annualized.