Why Did Yahoo!'s Stock Swoon After its Response to Microsoft?

When Microsoft (MSFT) stated that it would not see any reason to bid against itself, Yahoo!'s (YHOO) stick price had reason to swoon.

But that was early last week and officially after the market close on Friday.

Over the weekend, Yahoo! responded and said it was open to a deal, at a higher price. In that context, I wonder: why was YHOO down $0.50?

I understand had YHOO not answered that way, it should be down… but if now they are saying we just want more money… then it should not be higher… but it should not be lower, either.

Initially I thought this deal would get done at $50B (up from $44.6B). But now I think it will be done in the $47.5B range… mind you, I am saying that for entertainment value, don’t make any investing decisions based on that.

Disclaimer: I sold 87.5% of my holdings at $29 / share but remain LONG YHOO with no stake in MSFT.

Comments

[Robert DiAl...:]

I sold my YHOO at a great price and have some MSFt at a good entyr too. I think Yahoo is being too greedy and it is not justified. Enough already. Yahoo you lost your value is weak, settle before it is too late.

2008 Apr 08 01:18 PM