How black will today be for Yahoo’s shares? Following Microsoft’s withdrawal of its takeover offer on Saturday, shares of Yahoo took a 20 percent hit after the market opened this morning, opening at $23.02 (from Friday’s close of $28.67) but then started to edge up. That’s still well above the $19 per share that Yahoo was trading at when Microsoft originally made its offer three months ago.
If shares continue to drop, this could turn out to be a rough day for Yahoo shareholders. However, if the shares don’t drop much further, that could mean Wall Street is still pricing in another takeover attempt from Microsoft or someone else, or perhaps a Google advertising deal.
How low can Yahoo shares go, or is that it—a $5 drop?
Update (1PM ET): The stock seems to be holding up pretty well at midday, down less than $4 from Friday’s close. Update 2: The stock closed today at $24.37, down 15 percent. Not as bad as expected.
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Best line in the Yahoo Message Boards so far: “Sell, Mortimer, Sell!!”
Microsoft needs Yahoo and Yahoo needs Microsoft.
What Microsoft is buying is content and ad platform. Yahoo alone can not compete with Google.
Selling premium ad space is what microsoft wants, Yahoo has some of the best premium content. It is hard to recreate that even buying 50 other websites for a lot less.
Not too bad — in the sense that you won’t expect it to trade up today anyway
So is this to say that MS wasNOT affected.
That piece about Balmer being replaced was scathing.
Was this planted as a revenge tactic?
It seems suspect - it really does!
Where are all of the pundits that were calling for YHOO to open in the teens?
max 21% fall might be recorded …..
Yahoo was a profitable, growing company before the bid, and it continues to be after the bid. The market likes that sort of stuff. Tech reporters need something to report so you get articles about how CEOs should resign when no news happens. Welcome to journalism 2.0.
eric…
you appear to have a serious jones for yahoo…
what’s the deal? yahoo didn’t give you an interview at some point? somebody from yahoo get in line in front of you at some movie/concert?? what’s with the hate?
this is one of the primary things that people complain about regarding “bloggers” the obvious /apparent bias with topics, instead of straight out acticles…. in this case, regarding yahoo/msoft, you appear to be quite biased towards yahoo failing, or being acquired..
yahoo is willing to be acquired, at a given price. below that price, yahoo believes that they can build value on their own, without being acquired.
what’s wrong with that. there are examples of large tech companies making turnarounds. ibm, apple, hp, etc…
so, i ask you, what’s with the hate!!
peace
No worries… Y! will continue to surprise the world…
No big surprise here. Investors have definately priced in the chance of another deal and also Yahoo’s latest quarterly results. I would be really surprised to see it hit its pre-offer price. It closed on the Frankfurt exchange down about 15%, and won’t be surprised to see a similar result in the US. Bad, but not horrible.
@ Mike D - what was your prediction? I said $17 after three months - I would be curious to see what you posted - there have been so many comments on this I would not know where to look.
So based on Yahoo’s argument of how Yahoo was worth at least 37 bucks a share and MS offer was way too low - then I guess the must be getting ready to buy back a ton of stock? Or perhaps the shareholders are going to see this as a deal and come in big?
I know tongue and cheek - Seriously though this is a black day for them and I hope they stabilize and can get back to moving forward with their business. It will be an interesting story to follow for sure.
Cheers - Eric
Yahoo’s stock was up 50% since Msft offered to buy it up. Today, the shares are down 20% from last week’s level. Thus, Yahoo’s shares are up 20% since the pre-offer days.
For example, say the shares were trading at a virtual price of 100. Msft makes the offer, and they grow to 150 (50%up, remember?). Today they fall 20%, which is 30 out of 150. Thus, they are worth 120, which is 20% up from 100.
It’s still ok. But shareholders will be pissed off, of course.
YHOO down 16% right now, at 24. It’s finding it’s floor, which is likely mid-20s. Panic selling at the bell drove it down 20 percent. But many see this as a buying opportunity. If a deal re-emerges, you’ll make a wad if you buy in now. And if it doesn’t … if Yahoo is as strong as they say they are going forward, the price should fluctuate between 23 and 26 on any given day and week, depending on rumors and news.
As I had predicted weeks before that Google stock would be in half and Yahoo will no longer be around ina few years along with a US$40 billion bid offer 4 weeks prior to Microsoft or anyone even talking about a bid I was right.
So I e-mailed Steve Balmer the other day and stated either way Yahoo is toast. What I meant was with or without Microsoft Yahoo is toast.
Yahoo i s a Web1.0 company Web2.0 trying their best. But Web3.0 is already here and the natural evolution of the Web will make Yahoo like AOL.
If yous earch this blog hard enough you may see my comments weeks before all this took place.
Google does not need Yahoo, not even to wipe their rear end on the John.
Price stability. It’ll hang in the 25$ range for awhile until there’s some reason for it to go lower. For YHOO shareholders this ordeal has been a big win and has really reset expectations (in a good way). Doesn’t mean there won’t be lawsuits and senior execs won’t be tossed, but yeah all good in YHOO-town.
I would be curious to know whether the much-heralded shareholder lawsuits will (a) materialize and (b) have any legs. Assuming the answers are yes and yes, I can see precedents being set which would affect future behaviour in similar situations.
Also, would yahoo be liable for any payouts under the fiduciary action? If so, shareholders would basically be suing themselves.
Time to buy Yahoo! stock.
“… However, if the shares don’t drop much further, that could mean Wall Street is still pricing in another takeover attempt from Microsoft or someone else, or perhaps a Google advertising deal. …”
D’oh — or the market realizes that Yahoo is still a decent company, that they can probably still execute, or that they still command one of the largest sites on the net with the most display ads…
Sigh.
It’s at least entertaining to watch the tech-crunch crew drive off the cliff on this one. They were wrong on the outcome (as I suspected): http://blog.funadvice.com/2008.....ffect.html
See, the problem is that the two companies’ core technologies are 180 degrees different. Integration would be a nightmare. This is not an HP Compaq type of merger. And it would have hurt consumers too.
So we are AT LEAST where we were before Yahoo became a twinkle in Ballmer’s eyes. I don’t see the stock dropping too much further, and if it does, i’ll buy.
Eric (#10), I didn’t post a prediction here yesterday but I did vote on Fred Wilson’s poll on his A VC blog. My prediction was a $24 closing price. Longer term I think it’s going to be in a trading range between $20 and $26 for a month or two. I’ll be surprised if it dips into the teens in the next 6 months.
Yahoo stock was up above $30 just a few months ago, and then inexplicably fell and kept falling to $19. THAT is when Microsoft jumped into make an offer.. when stock was down. So they’ve reported another profitable quarter…. I think $25 is where it should be (sans Microsoft) if not higher. I think the $19 price that it had dropped to was illogical to begin with.
@Fabian, i agree. There is quite some potential within Yahoo and they justed had begun to recover from the “semelisis” starting to turn the company around when MS knocked at the door. Give them a bit time.
Michoo would have been a disaster for both anyway.
I closed my yahoo mail this morning
The fact that Microsoft hasn’t been able to successfully complete this takeover says volumes. Yahoo! is a much stronger entity and can survive without MS. MS, on the other hand, is struggling in the online space, needs some kind of recovery from the VISTA fiasco and has been looking for a distraction. Yahoo!’s doing some pretty interesting stuff lately. Who knows but I think the future looks brighter for Yahoo!
Maybe Microsoft already made the money they wanted.
Has anyone checked to see if any Microsoft interests bought up yahoo stock before the ‘buyout offer’. And if they sold Yahoo stocks just before the gave up on the ‘buyout offer’ ?
Well, as I said in my earlier comments on other article, YHOO will not go into teens! It will hover around in twenties. Validated.
Hey mister the-sky-is-falling arrington!
Yahoo is going up if you understand stock trends (wich I doubt)
M$ still in their 20s for the eighth year this decade (ballmer’s decade)
Apple rocketing past $180 and the iphone 3G is not out yet.
and the GOOG, the clear winner here.
So, your beloved M$ is still the fetid piece of shit it has always been.
Not surprising.
The web 1.0 leader worries about survival as a stand-alone property. Wall Street cares about growth and Yahoo has lost market share during the web 2.0 resurgence. Like Alice in Wonderland, the Yahoo community is bewildered.
Erick wrote: ‘if the shares don’t drop much further, that could mean Wall Street is still pricing in another takeover attempt from Microsoft or someone else…”
… or that maybe many people find extreme value in Yahoo and that this Microsoft battle increased that value in our minds, and in Yang and Co.
The real story is what will happen to Microsoft stock over the next few weeks and months as their failures pile up. What failures does Yahoo have? That they are #2 after Google (and in search and advertising only)??? Hardly a failure in most people’s books.
But Microsoft? They have had nothing but failures galore as of late… Vista losing to Mac/Linux,XP, Live (what is it even? who knows? who cares?), European Union fines, Office 2007 losing to Google Docs, etc, crazy Minority Report surface tables…
In fact, in the past five years, Microsoft’s biggest success has been… Halo and the XBox 360.
Question: How many people in your address have a msn.com email address? Now count Yahoo and Gmail. Yahoo (and AOL) still win. Gmail is a close third for most folks (2nd or 1st for web workers). MSN? I have one contact - out of 330. Two if you count the one microsoft employee’s work email (@microsoft.com).
The second biggest success for Microsoft would have been it’s steal of Yahoo if it had gotten away with it. They might still try, but the real spotlight is on Microsoft.
Quite frankly, what does the world need them for anymore? In my humble opinion? Nothing. Nothing at all. And I’m not a MS hater - I’m using XP right now and have Vista at home. But I could easily move to another platform if I had to.
Besides, the O/S won’t go away if M/S does. It will get sold as an asset. Who will buy it? Hmmm… I’m thinking IBM. Seems fitting. Gates *stole* MS-DOS from IBM 25 years ago or so. The circle would be complete.
This is a decent price for Yahoo… quite premium I would say. Maybe tomorrow will bring something new, but I think that for the next couple of months the price for Yahoo! will be in the 22$ range.
the gilmore gang’s prediction of bloodbath and black monday are proving to be non-sense (in hindsight of course). hulu redux?
Here’s a list of technology “S” curves that span the life of MS, some of which overlap in time:
a) The PC
b) The Internet
c) Gaming
d) Digital Media
e) Mobile
MS won big on (a) and completely missed (b). They caught on to (c) and tried (unsuccessfully so far) to get a footing in (d) and (e)
How many companies do you know that have successfully dominated multiple technology “S” curves? I don’t know of any (no, Intel isn’t one either). Microsoft, on the other hand, tried to do too many things and as a result did most of them poorly, just like Yahoo spread themselves too thin. Remember the “peanut butter manifesto”?
Without Yahoo or AOL or someone else established in (b) MS will pretty much have no choice but to forget about the Internet. With the inevitable decline of (a) and their failures in (d) and (e) that’s not an option if they want to continue to be relevant.
This isn’t over yet, not by a long shot …
@31 Great analysis
@19 Mike D - I think you are right - low 20’s is where it may just hang it’s hat. Some good points made here about how it does shed some light on Yahoo and all that it does have and all that MSFT does not have. Yahoo has some great strengths and I hope that perhaps this was the wake-up call that it needed.
Perhaps this rejection of MSFT’s offer is a sign of how Yahoo is coming out swinging and is stepping up to the plate.
Cheers - Eric
Ups…
Yahoo R.I.P
26% down on Microsoft’s offer. If I was a shareholder I would be totally pissed off.
This is a classic textbook case of a company’s directors acting in their own interests and preferences and totally ignoring the best interests of their shareholders.
Jerry is an ass-clown who deserves to be tossed out. What is his big claim to fame? He came up with the very “original” idea of a yellow pages for the web. Out of the thousands of companies that had cash splashed at them during web 1.0, Yahoo got lucky.
Contrast this with the brains of Larry & Sergey whose page-rank idea was ground-breaking 10 years ago and remains at the forefront today.
The first 100 days of Jerry’s new term as CEO came to nothing, and then he has the chutzpah/stupidity to turn down an offer like this.
Its shocking, billions of dollars in lost value for shareholders, all because Jerry remains too emotionally attached to his baby.
LOL “Web 3.0 is already here.”
Sorry homie, but aggregating Twitter streams does not a paradigm make.
And following onto Lawrence@28, there’s a lot of dumb people who’ll think you’re a loser if you are not TEH WINNAR!!!1 and dominance logic rules where you only find boys playing with their toys. Has nothing to do with real business though.