NEW YORK (Reuters) - Yahoo Inc's shares tumbled on Monday as investors punished the company for rejecting Microsoft Corp's $47.5 billion bid, though the fall was cushioned by hopes a deal may still be possible.
Shares of Yahoo fell as much as 20 percent in early Nasdaq trading before recovering some to trade at $24.47, still down 14 percent and far below the $33-per-share Microsoft offer.
"I think at $24, the stock's overvalued as a standalone Yahoo," said Mike Binger, a fund manager at Thrivent Financial, which owned both Yahoo and Microsoft shares. "I think $33 was fairly generous for Yahoo and if Yahoo won't accept it, they (Microsoft) did the right thing in walking."
Microsoft Chief Executive Steve Ballmer withdrew the bid on Saturday after talks collapsed, with Yahoo CEO Jerry Yang demanding $37 per share.
Shares of Yahoo fell as much as 20 percent in early Nasdaq trading before recovering some to trade at $24.47, still down 14 percent and far below the $33-per-share Microsoft offer.
"I think at $24, the stock's overvalued as a standalone Yahoo," said Mike Binger, a fund manager at Thrivent Financial, which owned both Yahoo and Microsoft shares. "I think $33 was fairly generous for Yahoo and if Yahoo won't accept it, they (Microsoft) did the right thing in walking."
Microsoft Chief Executive Steve Ballmer withdrew the bid on Saturday after talks collapsed, with Yahoo CEO Jerry Yang demanding $37 per share.
Shares of Microsoft rose 0.5 percent on investor relief that it was not overpaying for Yahoo, though concerns remained about how the software maker would develop its Web strategy in the face of a dominant Google Inc.
"We did like the idea of the Yahoo acquisition in the long run for Microsoft, but we did have reservations about how high a price they were willing to pay," said Dan Davidowitz, a portfolio manager at Polen Capital Management, which owns Microsoft and Google shares. "I'm not necessarily certain that the Yahoo deal is completely off the table."
One clear winner from the collapse of Microsoft-Yahoo talks is Google, whose shares rose 2 percent. A deal would have been one of the biggest mergers in the technology sector and may have threatened Google's steady expansion on the Web.
"The terminated Microsoft-Yahoo negotiations eliminate the risk for now of a stronger online advertising competitor to Google," Stifel Nicolaus analysts George Askew and Scott Devitt wrote in a research note.
Link: Full Story @ Reuters
Yeah, there's lots of theories. There's a theory out there that Nine Eleven was purposely executed by the US government. But don't worry, theories don't mean anything until they are proven
Whew!!!
Now that we've pointed out the complete irrelevance of that article, you should move on to the next one on that site that deals with actual news, not theories: here
Why not just sell your Microsoft stock and then you don't have to worry about it so much.
had to do it. saw this coming from a mile away. Yahoo are greedy, and i hope Microsoft stays away. I want Microsoft to buy some small companies, and just crush yahoo's shares into the ground. would serve them right.
if someone wanted to buy a company and then publicly walked away from negotiations, i'd be inclined to think something was wrong with the stock and dump some of it.
that's probably what happened. any business majors here to clarify for the rest of us?
if someone wanted to buy a company and then publicly walked away from negotiations, i'd be inclined to think something was wrong with the stock and dump some of it.
that's probably what happened. any business majors here to clarify for the rest of us?
MS didn't walk away. Yahoo's executives rejected thier generous offer.
MS did move on.
MS did move on.
Ever heard of Google-Yahoo ad deal?
Example: Yahoo CEO and Board of Directors own a “controlling” 30 percent of the company. The other 70 percent is mixed in preferred and common stock in small 1 – 10 percent blocks. Microsoft, not willing to go higher on their offer, does what they can to bring the stock down (such as statements saying they are not longer interested, it is not “financially viable” for use to continue to peruse this deal…AKA: I am not going to pay them more that 31 per share, he did not say he didn’t want it). SEC and other large analyst de-value Yahoo’s rating…The stocks falls sharply……The idea behind a proxy takeover is similar to a game of chicken. Microsoft now has to decide how long they want to wait and watch the stock go down before the “shock and awe” of this starts to settle and the Yahoo stock begins to go back up. Additional to this, the hedge fund brokers and other larger preferred stock holders will file lawsuits against the CEO and Board of Yahoo, which will cause the value and P/E ratio to fall as well….If MS knows what they are doing and plays the game right. Common stock and some preferred stock holders will start to run for the hills and take the best offer they can get from fear alone……AT THAT TIME…Microsoft begins to offer salvation to those frightened investors and buys stock in masses. Assuming all goes well…MS gets more than 30 percent total stock and hence, controlling stock power to fire the CEO and board….Hence the term proxy (going through the existing shareholders) to take over the company……To prevent the financial market as viewing MS as the nasty, evil, greedy company as we have all heard over the years, aside from the recent years of very bad press MS has received….It was wise for MS to attempt a buyout of Yahoo by normal offer for sale methods……Yahoo did not like the offer and got greedy…Now MS pulls out the playbook from the 80’s and 90’s and does what they do best…..Get what they want by all means possible, even if its not for sale and ethical…..
Wait until Monday, maybe Friday this week………right now, it’s a wait and see game…..I think MS getting Yahoo at 23 per share verses 31 or more….makes good business sense to me…Yahoo should have taken the 31….ooooopppps….
SEC as in Securities and Exchange Commission? They have nothing to do with rating stocks; they are the law enforcement agency.
Example: Yahoo CEO and Board of Directors own a “controlling” 30 percent of the company. The other 70 percent is mixed in preferred and common stock in small 1 – 10 percent blocks. Microsoft, not willing to go higher on their offer, does what they can to bring the stock down (such as statements saying they are not longer interested, it is not “financially viable” for use to continue to peruse this deal…AKA: I am not going to pay them more that 31 per share, he did not say he didn’t want it). SEC and other large analyst de-value Yahoo’s rating…The stocks falls sharply……The idea behind a proxy takeover is similar to a game of chicken. Microsoft now has to decide how long they want to wait and watch the stock go down before the “shock and awe” of this starts to settle and the Yahoo stock begins to go back up. Additional to this, the hedge fund brokers and other larger preferred stock holders will file lawsuits against the CEO and Board of Yahoo, which will cause the value and P/E ratio to fall as well….If MS knows what they are doing and plays the game right. Common stock and some preferred stock holders will start to run for the hills and take the best offer they can get from fear alone……AT THAT TIME…Microsoft begins to offer salvation to those frightened investors and buys stock in masses. Assuming all goes well…MS gets more than 30 percent total stock and hence, controlling stock power to fire the CEO and board….Hence the term proxy (going through the existing shareholders) to take over the company……To prevent the financial market as viewing MS as the nasty, evil, greedy company as we have all heard over the years, aside from the recent years of very bad press MS has received….It was wise for MS to attempt a buyout of Yahoo by normal offer for sale methods……Yahoo did not like the offer and got greedy…Now MS pulls out the playbook from the 80’s and 90’s and does what they do best…..Get what they want by all means possible, even if its not for sale and ethical…..
Wait until Monday, maybe Friday this week………right now, it’s a wait and see game…..I think MS getting Yahoo at 23 per share verses 31 or more….makes good business sense to me…Yahoo should have taken the 31….ooooopppps….
Why would microsoft buy preferred stock? Preferred stock have no voting rights. Do you even know what the hell you are tlaking about? There is no such thing as a controlling 30%.
What's sinking is MSN!
What's sinking is MSN!
Cause MSN is being merged with Windows Live platform dude that's why it's being phased out.
I take it you haven't seen Live's marketshare numbers?
HAHA
MS says they are walking away, quite literally and not looking back. Good for you MS, you gave them a great offer and they got greedy, don't give them anything now! Its quite clear that Mr Yang was not acting in the best interests of the shareholders - this deal would of offered massive returns for the shareholder. The sole aim of a business is to maximise the wealth of the shareholders - they are the one who fund the company and they want to see a worthy return, something Mr Yang will not give them!
I've always hated them... Can't really tell you why, maybe it's their childish logo. Maybe it's their crapware infested DSL installers... whatever it is, 'bout time. And, Microsoft, don't give them anything, watch them fall as every investor pulls out and the board members are sleeping in a gutter... </3
I dont see MS dropping off completely after evaluating so much. I think microsoft was working on this for quite some time and spend loads of money and just wont let any one ruin their work. This is the best time to invest some money in yahoo and buy some shares, my instincts say.
Microsoft was being generous, and like everyone else has said, i hope Microsoft come back, and give them there $25 per share that Yahoo is worth.
there is a saying.. if you can't beat them, join them. Well MS tried that and now they are going to do the opposite. MS will just sit back and watch yahoo implode. Shares are dropping like a rock. This will lead to restructuring, downsizing, and eventually a 404 on the yahoo.com site lol
No they didn't. Microsoft didn't buy them.
Instead, they got thrown in the trash. :p
Commenting has either been disabled on this article or you are not logged in. Click here to login or register, its free!
Note: Anonymous commenting is disabled in order to keep the quality of responses to a high standard.