There is some confusion over what price it would take to close the YHOO/MSFT deal.
This has a lot to do with understanding the difference between shares outstanding and float. Yahoo!, for example, has 1.25B shares in its float but 1.39B shares outstanding.
The float is the number of shares the company has issued, the shares outstanding are what are freely-traded. To simplify the matter, this implies Yahoo! has about 124M shares that are restricted and not trading on the open market. I’d have to read every single share agreement to know if those would in fact be at play in a deal, because sometimes stock vests when there is a liquidity event, such as a sale of the company. For this reason, it’s important to note that it is more cautious to use the 1.39B number, because ceteris parabus, shares are vested and tradable when there’s a liquidity event. For this reason, it is “more right” to assume that to get a $50B market cap deal, MSFT would have to offer $35.91… this is why this deal is very much alive… Yahoo! is asking for $40/share but I think a $36/share offer would get the deal done. As a shareholder, obviously I prefer $40/share, but no need to be greedy.
Digg this Blog
Share on Facebook
WatchMojo on Twitter
WatchMojo on YouTube
Add to Favorites
WatchMojo Newsletter
PLAY
