Talk is Cheap

5 Key Quotes from Yahoo! on the Internet Industry

And the point is....

Icahn: Smart, Dumb, or Just Plain Screwed?

How much does Mr. Icahn stand to lose from this mess? As I understand it, he bought 10 million shares at around $25 and bought 49 million options (strike price $19.50, option premium around $5) that expire in 10 years. So even if the stock price falls to $20, he decides to get out, he loses about $300 million.
Going by his record, I do not think he will be willing to lose that kind of money. He will do whatever he can to get control of the company and then even if he sells the company for $27/share he would make about $200 million and MSFT would be happy to get the deal done at $27. Shareholders would not want to miss the boat again so they would support him.
The guy made billions by doing this kind of stuff. He cannot be lucky so many times to make billions nor can he be stupid to flush $300 million down the toilet.
It would be interesting to see what happens in coming weeks.

Disclosure: Long MSFT, No position in YHOO