I always figured MSFT would walk away with YHOO, but after a month or so, I sold 87.5% and blogged about it here, explaining why.
Then this month I sold another 7.5% of my initial holding.
Right now I own 5% of my once-6-digit-holdings in YHOO, always thinking I would kick myself for having sold any shares.
Hmm… I am not kicking myself right now.
I never understood what drove me to make that decision, because while my head said “done deal” my gut said otherwise.
Two years ago I was on the verge of losing Mojo Supreme, I would not have torched the building, but I found a way to avoid losing. Something told me Jerry would go much farther to not lose this fight.
Jerry went all out, he torched the joint and all that remains is Black Monday’s soot and smoke.
That is unfortunate, but it shows how investing in the stock market is actually not how average Joe’s can balance out wealth in America. Investing in public companies is the impotent man’s way of creating wealth, I now realize.
It’s somewhat hypocritical that in Yahoo!’s official response to MSFT pulling the bid, Yang ranked “shareholders, employees, users, partners” in that order, because frankly shareholders were considered the least in all of this.
Yang could care less about the Average Joe investor, that much is clear, but if he thought MSFT was a touch stakeholder to manage, just wait until Black Monday.
Disclaimer: I still have 5% of my initial holding long.
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WatchMojo NewsletterWhere will YHOO’s stock price start and end at on Monday?
$20-25:
- It will open at $24-ish, which is $5 less than what it closed at.
- Throughout the day it will tread down towards $20
- But it will close about $21, mainly because a lot of people bought in Friday expecting a deal this weekend. Those short term arb traders will cover positions by selling and that will add this added effect.
There’s a psychological floor at $20 because PE buyers would step in at those prices, as would MSFT, again.
But in one week, YHOO will be closer to $25 than $20 because people are baking in a M&A takeover bid.
In the days leading up to MSFT pulling the offer to acquire YHOO, one has to suspect that MSFT CEO Steve Ballmer spoke to a great deal of YHOO shareholders. Many had already shown a willingness to accept $31, and I presume the vast majority seemed to have indicated that they would accept $33, and that is why YHOO never got a penny more, let alone its “bong-induced” $37.
I initially sold 87.5% of my YHOO shares, then an additional 7.5%. I am now down to a mere 5% and still believe that MSFT will end up buying YHOO but for something in the $31-33 range, here is why:
- in MSFT’s latest response, they seemed to outline what angry shareholders need to do to force the Board to accept MSFT’s $31 offer, let alone its $33 offer.
- MSFT now avoided becoming the bad guy, instead turning itself into a prospective white knight against a strengthened Google (by way of a YHOO search deal), AOL merger (which let’s face it, now that the MSFT deal is off, will not be done).
- News Corp., might change sides again, but what we fail to recognize is that by bidding $44.6B for YHOO at $31/share - and agreeing to $33/share or $46.2B - all would-be buyers know they must come in at $45B or so otherwise MSFT can always re-enter the picture.
MSFT’s withdrawal is at most a very short term lucky bounce for Yang and YHOO; in the short, mid and long term, it makes MSFT look like a welcome savior for YHOO investors.
