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Tuesday, May 06, 2008 --- 79 days ago http://www.truthonthemarket.com/2008/05/03/microsoft-withdraws-its-bid-for-yahoo
| This just in: Microsoft withdrew its most recent bid for Yahoo and announced it will not be making a hostile move for Yahoo. This comes on the heels of the announcement a mere day ago that Yahoo and Microsoft were sitting down to try to hammer out a friendly deal. Fickle, that Microsoft is!
Allow me to answer questions folks might ask in the aftermath:
1. Question: What does this retreat by Microsoft say about the economy and the M&A market?
Answer: Nothing. Nada. Microsoft wanted to buy Yahoo for cheap. Yahoo wanted no part of that. Over the past 20 months, while Yahoo’s stock has been weak, it has traded on-and-off in the $30-ish range. Microsoft’s final $33 per share bid was nothing to write home about. If Microsoft was making a credible bid and they thought Yahoo was a good long-term strategic acquisition, we would have seen bid prices moving up further than they have over the past three months.
2. Question: What is going to happen on Monday to Yahoo’s stock price?
Answer: Yahoo’s stock price is going to get pummeled by arbs exiting their short-term investment. The drop in Yahoo’s stock price will mean nothing of substance. I promise. So, while the media is going to get all excited on Monday about the drop in price, and the 5 p.m. news on Monday is going to talk about Yahoo being the day’s biggest loser, ignore the chatter. Or buy Yahoo stock while it is cheap.
3. Question: Is t ... |
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