Microsoft is looking at its $42 billion bid for Yahoo in light of "worsening market conditions" according to Reuters.
Microsoft has been repeatedly trying to engage Yahoo's board in discussions, this person said. But the market has deteriorated and changes in Yahoo's business may have dragged down its value below what it was when Microsoft made its $44.6 billion bid for the Internet company on January 31.
I don't know which Yahoo people fear more. Being bought by MSFT and having to work for the evil empire, or not being bought by MSFT and seeing the share price collapse to what would likely be half its current price or less.
I've heard that Yahoo is still heavily dependent on non-performance advertising (about half their ad revenues), and that in the last bubble, this was the sector that was hit the hardest.
Oh, and MSFT's Rapt purchase means that Yahoo can look forward to replacing it's ad inventory management and pricing system if the deal doesn't go thru. Of course, they're already doing that with the Apex project, but I wonder how the departure of a few of the project leads is impacting that project.
It won't fall to $20 unless the offer is outrightly rescinded. I hope to see it fall as low as $24 on Monday, but I'll scoop up some shares if it hits $25.
There's no way Microsoft walks away from this. They've wanted Yahoo! for years. After a market down turn, Yahoo! hit an incredibly low price and Microsoft was able to seize the day.
If they drop the offer, there is no way the Yahoo! Board will accept it. None.
At the current offer, they will assuredly win a proxy battle. But if they reduce the offer, they will reduce their chances of winning a proxy fight.
Also, Q1 earnings are coming out soon. The earnings call is Apr 22th. If Yahoo! meets or exceeds earnings, the offer will most likely need to be increased. If Yahoo! does not meet earnings, then Yang and the Board will have no choice by to accept Microsoft's offer.
This is a bluff. Hopefully enough suckers buy into the story, sending YHOO down. I'll gladly scoop up their shares at a discount, and counting my money once MSFT ultimately gets their original offer accepted this June or July.
So, suckers, start selling!
about freaking time.
jerry needs a wake up call.. yahoo is not the great company he think it is.
