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Yahoo To Reject Microsoft Bid
Many outlets are echoing a subscribers-only report in the Wall Street Journal that Yahoo's board has decided to reject Microsoft's takeover offer. The NYTimes offers the only other independent reporting so far confirming this claim. The report says that Yahoo will formally reject the offer in a letter on Monday, since they believe it "massively undervalues" the company. Microsoft offered $31 per share, a 62% premium on the stock price at the time, for Yahoo; but the latter believes that no offer below $40 per share is tenable. The AP has some background on Yahoo's options in responding to the bid.
Redmond weather reports are predicting thunderstorms, with a 90% chance of scattered chair showers.
Paleotechnologist and connoisseur of pretty shiny things.
As much as we all love Google, I think there needs to be a variety of search engines. Microsoft-Yahoo might have been a bigger player, but we'd lose the variety. Ask.com almost doesn't count.
Either:
1. Microsoft ups their offer. Yahoo board indicated they wouldn't consider anything under $40.
2. Microsoft walks away. Shareholders revolt after stock drops big time.
3. Microsoft wages a proxy fight and tries to win over shareholders over the board's head.
(3) is the most likely outcome. Microsoft already said something like "we won't take no for an answer".
Their P/E is 62. *SIXTY-TWO*
That means they don't make money. At least not compared to the already-inflated value of their stock. The value of their shares should be down in the single digits right now based on their income -- a P/E from 15-20 would be much more reasonable. Microsoft comes along and offers to buy them out for an amazing amount of money, and they turn it down?
Refusing this deal borders on illegal, assuming their job is to act in the interests of their shareholders.
You're ignoring, they're offering $31 "equivelent" in Microsoft stocks. Not in cash in hand. How will the stock market respond when suddenly there's this extra 20% in loose Microsoft stocks floating out there?
Hello stock price freefall!
$40 as a minimum is quite reasonable when you consider the massive devaluation which will occur the moment the deal goes through.
Karma Whoring for Fun and Profit.
The problem with American business and the financial "industry" built around it is that there is actually no interest at all in sustainable business, but rather exponential profit growth at all cost, even the death of the company itself. The company dies, the money vultures move on to the next target.
If you want news from today, you have to come back tomorrow.
That's simply wrong. The offer was $31 in cash OR 0.9509 of a share of Microsoft common stock.
Yahoo would have been daft to accept as it was. The position they have taken (if correct) is the obvious line - "massively undervalues". The ball is firmly back in MS's end of the court - they will be forced to put themselves into substantial debt trying to force a hostile takeover (aren't MS sharholders going to love that on - yeah go ahead and piss away our 19B cash pile for a failing company) - or give up on it and look like a coward. Ballmer always likes to play the big man - it will be interesting to see how big he reacts to this. Depending on how obsessed he is about getting his own way this could end up making the AOL Time Warner debacle look like a minor business misdemeanour decision. 60B would be a out-of-thin-air figure I could see this ending up at - that would be absolutely hilarious.
The other main option, namely attempt a takeover by proxy by trying to fill the Yahoo board has now (broadly) been nullified. If the current board is taking a position that will (if the takeover happens) make YH shareholders more money then they are not going to vote on MS stooges who would immediately accept the MS offer.
It's possible to learn a lot by examining the world around you. For example, what am I bid for this half-eaten, moldy burrito? I am accepting no offers below $40.
Microsoft has proven, over many years, that it does not know how to run a search engine. Buying Yahoo will not magically make Microsoft smarter, especially since Yahoo has proven, over many years, that...
Most of Yahoo's value spawns from how *completely* different their company attitude comes across from stuck-up, self-important, dying companies such as microsoft.
This is backwards. Give it five or ten years, and Yahoo could be buying microsoft (and not just because Yahoo's value is going up.)
But Yahoo's value would plummet by at least 75%, according to my completly random guess, if it were a division of MS. Imagine if your yahoo mail account was suddenly an MSN account. Your Yahoo IM suddenly merges with MSN. They both become worse than trash - I cannot imagine an organization (aside from the current executive branch of the us government) that I trust less than microsoft - all incompetence aside.
If they were people, I would invite Yahoo over to a backdoor bbq. MS, on the other hand, I'd invite to.. nowhere.
- d
YHOO board comes out against, MSFT will rail that YHOO isn't worth that much, a month from now MSFT will offer a sweetened offer - call it $34 and propose its own slate of directors for the annual meeting. YHOO board will accept because they don't have a choice. MSFT will complete the purchase Jerry Yang and his cronies will go back to the bars in the Valley start their own venture capital firms or become part of one of the VCs like Kleiner-Perkins. Deal closes in the 4th quarter.
(4) Their bid is denied thanks to EU anti-trust regulators, but they manage to cause havoc for Yahoo anyhow by distorting their stock price.
There may be some Slashdot readers who don't know the story about the chair: Ballmer Throws A Chair At "F*ing Google".
....
Quotes:
At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: "Fucking Eric Schmidt is a fucking pussy. I'm going to fucking bury that guy, I have done it before, and I will do it again. I'm going to fucking kill Google."
Thereafter, Mr. Ballmer resumed trying to persuade me to stay... Among other things, Mr. Ballmer told me that "Google's not a real company. It's a house of cards."
Quoted from legal papers in a court case brought by Microsoft.
As a share holder in Microsoft I think that Microsoft has way better things to do with my retained earnings than pay too much for nothing right before the whole economy tanks.
He's an idea. Sell you stupid DRM pipe dreams down the river of wasted time and turn into what you should be, a DIVIDEND paying LOW GROWTH utility company. Make a good operating system with no bells or whistles that will pass any anti-trust case, sell it for a low enough price that the trouble of downloading a bit torrent crack isn't worth it. Make it so I can add/remove modules over the Internet at will for low low prices. Then make a a version that looks fucking fantastic and sell it like a Mac for a premium to fanboys and people who think translucent colored baubles are the shit.
Someone over there has finally woken up. I have been teaching Office 2007 and for god's sake it's a great product. 90% of the things that have made want to skull fuck the assholes in the Office department to death are gone. The menu system is great. The Page layout break controls are great. The automatic formating is now controllable. Best of fucking all you can now set the default action for paste to be text only.
I want Microsoft to stop being a bitch like Sony. (Don't FUCKING sue yourself.) Don't get delusions of being a media company or and Internet company you twits. Give me my fucking retained earnings as a dividend, make Office for a profit, make Server for a large profit, and make Windows so it works underwater in space, in the future, across standards, platforms, without a hoot because it is a god damn utility that doesn't give a fuck because everyone has to use it and doesn't hate it because it just fucking does its job come hell or high water.
Shouldn't that be Yahoo! ?
I don't get why people are bitching at Yahoo! over this. Do you WANT Microsoft to own them? I don't care WHY they turned it down, I'm just glad they did, I personally don't want to see it happen at all! I'm not even sure if the FTC would like it much.
Pancakes. Oh I blew it.
There's an equilibrium, though. When a large block of stock is sold, the price of the stock may drop momentarily, but then it is undervalued and hedge funds and mutual funds snap it up until it is back to where it was. This effect is born out empirically. The demand curve for a stock is extremely steep: if it drops even a dollar, everyone and his mother wants to buy, which pushes it back up to its equilibrium price.
The one exception is when insiders sell large blocks of stock -- then the market assumes there must be bad news coming, and the price does drop and remain low. But this effect is informational, and the magnitude of the drop has much less to do with how many shares are dumped onto the market than it does with what the dump says about the insider's opinions (e.g. what proportion of his stock he dumps, and how many other insiders do the same simultaneously).
In any case, the fact that there are "loose shares" dumped onto the market does not by itself affect the price.
The only thing the parent needs is some cool, blue, semi-translucent baubles and a Star Trek reference.
Why do I have the overwhelming sense that something immensely stupid is about to occur? I've got my popcorn ready. Who knows, SCO did it...they banked everything on a whim. Maybe M$ will follow suit and bank everything on a hostile takeover. I wouldn't put it past Ballmer. But with the insanity that seems to be taking firm hold of the world and everything in it, I wouldn't be surprised if Ballmer, in a monumental display of egotistical machismo, tries to take down Yahoo, and his own company with it.
FreeBSD doesn't work well with Windows. It is not a joke. If it worked (or works) it could be a huge disaster for both companies. Yahoo buyout is not some "dotcom startup invented something, lets buy it" thing, 46 billion is a huge money even for Microsoft. They can't say "Oh it didn't work" and turn their backs.
Companies are not compatible with each other. Yahoo is a open source powered services giant. MS is Windows maker who struggles to make Windows more credible in large installations. Would MS pay $46 billion to further advertise open source technologies and operating systems like FreeBSD?
I suggest Slashdot people who thinks Yahoo is lame because of their homepage check http://developer.yahoo.com/ to see what Yahoo actually is.
If it were a "real" company, like, say, Netscape (was), the Empire could cut off its air supply. Same with "Linux" (_not_ a "real company", doesn't need to make money or stay "in business" in order to survive and continue to challenge The Monopoly). "Real Companies"(tm)(r)(c) can be eliminated using "real" monopoly business abuse. This is what _really_ has SteveB pissed off and frustrated to the point where he's reduced to swearing and throwing things.
He has viable competitors out here, about which he can't do a fsckin' thing.
Oh, and _zero_ market loyalty, after ten years of abuse. Make that negative numbers...
Exceeding the recommended torque is not recommended.
MS bid $31. Yahoo counters with "Not a penny under $40". MS counters with $35 or just does a hostile takeover.
I challenge you to show how Yahoo is a sustainable business. Before the MS offer, they just announced that they would have to fire 1000 employees. The company's revenues year over year are shrinking because their management cannot find a way to translate all of their site traffic into money. They have a history of failing to meet their own projections. At the very least this a poorly run company, and with the coming recession, I do not think its sustainability is out of the question.
Second as an individual that owns stock, and thus is one of these "money vultures," why should I or any investor want to own Yahoo's stock, outside of takeover speculation. The company offers no dividend, which means the only return on investment I will see in it is from the company's growth, something it has clearly failed to predict, manage, or deliver on.
You claim that the entire financial industry is built on "exponential growth" but you fail to ignore the fact that Yahoo abd most tech stocks choose to hold their stock out as a growth stock, meaning they can only justify their stock price by *gasp* growing. If Yahoo were too come out tomorrow, declare a dividend (like say Altria), and pay some of the $1.5 billion dollars in cash they have to their shareholders, than their stock would finally have some intrinsic worth NOT tied to their rate of growth. (Note: For an explaination of growth stocks vs. value stocks, check this link out.)
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
--- and a good many more who wish the joke could be retired along with the other long-since-gone-stale running gags that pass for humor on Slashdot.
I'm going to get modded flaimbait for this but I don't care.
I'm poor. I make under $30k a year and live in Los Angeles. Yet despite that, I am able to save 25% of my income each year and invest it, some of it in oil stocks to help offset the cost of commuting. The problem in this country is not that poor people cannot save and cannot live a decent life, it's that they choose not to. They choose to have children before they can afford it. They choose not to take out loans to go to college. They choose to rack up huge amounts of credit card debt and only make the minimum payment each month. I have no sympathy for these people, when I with the same paycheck can live a decent life and take steps to grow my wealth rather than squander it.
This isn't the 1890s, its not just the "high and mighty rich investor" that can make money of the stock market. If you can save $100 a week, you have no excuse for not partaking in the the profit making, and you are reckless for not doing so.
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
I find most discussion only focuses on search. Certainly this is part of Microsoft's strategy. What is more important for Yahoo! is it's other services. Yahoo! groups, mail, TV, calendars, widgets, and lots of other properties.
Is it possible Microsoft is after these? Like Palm wasn't after BeOS?
What would the acquisition of these other properties do for Microsoft? For Google? Google could sell the search and advertising off and get a lot of mileage off of the other parts
I think it's all this other IP that puts Yahoo! in a much better position then the narrow "Search Merger" view provides.
I love my computer -- You make me feel alright (Bad Religion)
You just make shit up.
Here is their balance sheet:
http://www.microsoft.com/msft/reports/ar07/staticversion/10k_fr_bal.html
It shows that $17 billion in short term investments you are talking about. Here is the breakdown of their investments:
http://www.microsoft.com/msft/reports/ar07/staticversion/10k_fr_not_02.html
It shows about $7 billion of common stock and equivalents, none of which is categorized as short term, and about $19 billion in various bonds and similar instruments, of which there is about $17 billion that is categorized as short term. None of that $19 billion is Microsoft stock.
None of this mentions the $10 billion in unrecognized revenue that they have lying around. This is money that they have promised to pay themselves later on in the year.
Microsoft enjoys an excellent cash position, and has large amounts of continuing operating income.
Nerd rage is the funniest rage.
Not a criticism or flamebait, so please don't take it that way.
I have a yahoo account (don't really use it), but I primary think of them as a search engine. Used them until after google came along, but joined the pack.
So based on that, here's my question - _if_ Yahoo is a search engine, and _because_ you point how they're not a sustainable business, then perhaps the real deal is that your post has three links in it, none of them from Yahoo. In fact, you use google as the first link to find out / prove how Yahoo was doing with its employment.
No one pointed out the irony until now. It's that proof in and of itself of the trouble Yahoo _really_ has? Advertising requires mindshare or is meant to build it - whichever way you want, you just proved _something_.
Pathological kinda promises Path + Logical - but instead, you get stuck with pathetic.
Somebody can't count.
MS was a customer hostile enterprise (eventually proved criminal, time and time again) from the day Gates crawled out of bed and set it up in 1975, with mission: Enrich ME, fuck everyone else. (Remember the anti-hobbyist memo (first of many famous incriminating memos)? The leopard doesn't change its spots.)
I make that 32 years. The cost to civilisation is incalculable, and we'll be paying for decades to come. Millions of lives are made worse by Windows and every other worthless MS product, every day.
Ballmer was hired and retained to continue the disgusting legacy.
you had me at #!
-$12 commission. You can do the same thing in Vegas with a $1000. IE you bet $50 a day, and double down until you hit once. Even with $1600 it would be on average 1 month until you lost your initial $1600, by then you would have won $1550, so if you reinvested that you would likely make a year until you lost everything. The casinos hate this, not because they lose money at the table, as many think (eventually they get their share cause the 0, 00 put the odds in their favor eventually,) But these are disciplined gamblers who don't bet enough to be worth the casinos time. Also with comps, the time in the casino they assume more money than $50 a day average will be at stake, so they lose some off the table.
Similar with you "Vampire" strategy, this type of betting actually stabilizes a stocks value, would slow it's growth but also slow any decline. So not really bad for the stock generally, again it may upset the Mutual funds,etc. Because their is a need for the majority of $ invested to be educated to keep a stock in line. These non fundamental purchases encourage movement for movement, not the preferred movement for fundamentals that is supposed to keep the markets efficient.
"Both companies [Sun and Novell] pretty much lost out whenever they took on Microsoft".
I thought you were going to say, "... when they took on Eric Schmidt". Novell was at the top of the network software market. Through a lot of foolish moves, like buying Word Perfect for $1.1 billion, if I remember correctly, in 1994, Novell became "Who is Novell?"
I don't have any idea how much Eric Schmidt was responsible for the downfall of Novell. He became CEO of Novell in 1997. By 1999, "Novell had lost its dominant market position".