Deal Dead: How Low Will Yahoo Stock Go?

The New York Times reports in Monday's paper that Yahoo stockholders will be wondering Monday how low the internet company's stock will go, and how long it will stay there:

These questions are high in the minds of Yahoo shareholders, and probably its management, as the company considers its options after Microsoft's decision to withdraw its offer to buy Yahoo for $33 a share, or approximately $47.5 billion.

Much will depend on Yahoo's next moves, which could include a partnership with its chief competitor, Google.

People close to Yahoo said that the chief executive, Jerry Yang, and his team, who told Microsoft they would not sell for less than $37 a share, greeted Microsoft's decision as a victory. High-fives were exchanged Saturday afternoon when they learned Microsoft was backing down.

Kara Swisher, of All Things Digital, reported this weekend that througout the discussions, Yahoo and Microsoft were a bit of an odd couple:

"There has never been a moment when there was agreement on anything," said the source. "Can you just imagine how a merger would have been with this as a prelude?"

Indeed. Cats and dogs. AOL and Time Warner (TWX). Oil and Water. Obama and Hillary. You get the picture.

Comments

[dtrobert]

Seems like there's a huge misunderstanding on this story:

Microsoft went after Yahoo! Not the other way around. This was an unsolicited offer, because Yahoo! was not looking for a buyer.

[wmbear]

IT WAS ESSENTIALLY AN ATTEMPT AT A HOSTILE TAKEOVER...

By Microsoft. Hence Yahoo's setting of an unrealistic price, hence the high-fives when the deal fell through. Can writers of these stories please learn to do their research? I have no great brief for Yahoo since they trashed their (formerly) great news boards a few years ago but still. Come to think, Microsoft-Yahoo is kind of like McCain-Hillary. What's to choose?

[CarlsV]

who cares?

[dadw5boys]

Microsoft will be back where they gonna go AOL? lol

[ceasenake]

Yahoo will drop to $15 per share.

[Earl]

Well below that. They got nothin'. Internet empires are nothing more than trends that cycle through, more like games and movies than General Electric. It's too easy to build a better mousetrap.

[jnratliff]

During the Clinton years the repubs said you had to have 160,000 jobs a month to keep up with the new people entering the work force well bush says they have created 2,000,000, that's two million new jobs. Well 160,000 a month times 96 months = 15,360,000 that's fifteen million three hundred and sixty thousand jobs just to stay even. That leaves bush short 13,360,000 thirteen million three hundred and sixty thousand jobs short of just staying even.
Don't you idiot repubs get the fact that you have screwd up royaly! That your nonsense is just that nonsense! Stupid ideas foisted on stupid people!

[handyallen1]

yahoo should of taken the offer it will drop like a rock

[dtrobert]

It strikes me as ridiculous that anyone would think that Microsoft is coming out of this a winner, and Yahoo a loser. Microsoft does not have a single web-oriented success to its name; it has a LOT of attempts, but none of them have been successful in any way, shape or form. Microsoft's web ventures are littered with corpses.

Yahoo is not the healthiest of web companies, but at least they have a decent track record. Their Yahoo Mail service, for example, beats the pants out of Microsoft's Hotmail service; this is the opposite of what should be expected, considering that Hotmail was the market leader for years, that is, until the very day Microsoft acquired them (and then they fell...). Yahoo is FAR better off without Microsoft's ball and chain.

Yahoo with Microsoft = Certain failure.
Yahoo without Microsoft = At least they have a chance of success.

Once again, let me repeat the fundamental point here: Just like George W., Microsoft is a known commodity in the web world: it's a known failure.

[Viper]

And Yahoo has failed at every attempt ( had to bring back the old CEO) and it stock is on the way to 10 and a suit by its own investors against the board members who just cost them 23 bucks per share! The board memebers already engaged defense lawyers.

Yahoo is so great, there were no other suitors at any price.

Regards

[dtrobert]

Microsoft went after Yahoo!, not the other way around. So it was certainly not a case of "no other suitors at any price". That's really just Microsoft's spin, to detract from the fact that Microsoft lost big time here; this was Ballmer's baby.

Simple fact here: Yahoo! may not be the best run company in the world, but Microsoft has precious little to show its investors these days. Vista's a huge catastrophe, Google's taking it to the cleaners in the SaaS space, and no one wants to touch their web offerings. Any investor worth their salt should look at Microsoft's current market position, as well as the string of failures under Ballmer's direction and realize that this is not the Microsoft of the 90s; it's the Apple of the 90s...

[dtrobert]

Addendum: Microsoft's only successful division right now is in Games. And the 360's now in trouble from stiff competition from the Wii and even the PS3.