Microsoft's shareholders are unhappy about the Yahoo offer--and they're expressing their displeasure by voting with their feet. As they do, they're driving the price of Microsoft's stock down, which, in turn, is driving the value of Microsoft's Yahoo bid down. As explained here, it's now only worth about $29.50 per share.
If Yahoo's shareholders can be persuaded to take $29.50 instead of $31, no problem: Microsoft can pick the company up for $41 billion instead of $45 billion. (This discount might make its shareholders happier--although perhaps they agree with us that, as proposed, the deal will be a disaster).
More likely, however, Yahoo shareholders will insist on receiving at least what Microsoft offered initially--$31 per share. If Microsoft wants to maintain its half-stock / half-cash mix, therefore, it will have to adjust the share exchange rate to account for the reduced value of Microsoft's shares.
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