"If you are planning on doing business with someone again, don't be too tough in the negotiations. If you're going to skin a cat, don't keep it as a house cat." – Marvin S. Levin
I admit it. I could care less about the purchase of Yahoo by Microsoft. Saturday was Kentucky Derby Day and I was watching the Derby (condolences to the barn of Filly letter to CEO Jerry Yang of Yahoo withdrawing Microsoft's offer to purchase Yahoo as reported by Tech Crunch and Business Week.). But apparently Saturday Microsoft CEO Steve Ballmer sent a
The Derby was great with Big Brown lumbering and charging from an outside position to win the race and that has not happened since 1929. That is the same year as the "Black Thursday" stock market crash that was a precursor to the Great Depression. Ominous, huh?
Speaking of stock crashes, this morning, blogs across the world were rejoicing, complaining, second guessing, and prognosticating about the withdraw with many stating that Yahoo's stock price has fallen "more than 20%" today after withdraw of the offer. The stock had fallen about 14% when I looked at Yahoo Finance for the up to the minute stock price. There was also a link to Jerry Yang's comments that the coverage of the deal was mostly misinformation. A letter from Mr. Yang was posted publicly today at nationalpost.com and Forbes.
The stock price is now floating around $24 per share. That price is still higher than the price the stock held in February (about $19 per share) when Microsoft proposed a $31 per share purchase. According to news reports Yahoo was at $37 and Microsoft was at $33 per share.
Want my prediction about what happens from here? Ignore the hype today and wait and see what the institutional investors, mutual funds, and state pension fund managers do. I imagine the big investors will not be pleased watching a guaranteed $33 per share turn into a slide back to pre-offer $19. Investor lawsuits will quickly eliminate the emotional tie Yahoo had to $37 per share valuation. But, don't listen to me. I was sure Visionairewas a good bet at the Derby – it came in 12th.