In the days leading up to MSFT pulling the offer to acquire YHOO, one has to suspect that MSFT CEO Steve Ballmer spoke to a great deal of YHOO shareholders. Many had already shown a willingness to accept $31, and I presume the vast majority seemed to have indicated that they would accept $33, and that is why YHOO never got a penny more, let alone its “bong-induced” $37.
I initially sold 87.5% of my YHOO shares, then an additional 7.5%. I am now down to a mere 5% and still believe that MSFT will end up buying YHOO but for something in the $31-33 range, here is why:
- in MSFT’s latest response, they seemed to outline what angry shareholders need to do to force the Board to accept MSFT’s $31 offer, let alone its $33 offer.
- MSFT now avoided becoming the bad guy, instead turning itself into a prospective white knight against a strengthened Google (by way of a YHOO search deal), AOL merger (which let’s face it, now that the MSFT deal is off, will not be done).
- News Corp., might change sides again, but what we fail to recognize is that by bidding $44.6B for YHOO at $31/share - and agreeing to $33/share or $46.2B - all would-be buyers know they must come in at $45B or so otherwise MSFT can always re-enter the picture.
MSFT’s withdrawal is at most a very short term lucky bounce for Yang and YHOO; in the short, mid and long term, it makes MSFT look like a welcome savior for YHOO investors.
Subscribe:
May 4th, 2008 at 12:54 pm
As a very unhappy Yahoo shareholder, I can only hope so!
Your blog is incredibly insightful — it gives a very fresh and mostly (!) unbiased perspective on a range of issues from technology, business, strategy, execution and what not. Please keep up your commentary!
Thanks..and good luck with Watchmojo!
May 4th, 2008 at 12:56 pm
Thanks for the kind words.