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Yahoo Sued for Spurning Microsoft
tuxgeek writes "In the continuing saga of Yahoo resisting a Microsoft buy out, Yahoo is now being sued by its shareholders. 'Two Detroit pension funds have sued Yahoo Inc. and its board of directors, saying they breached their duties to shareholders in trying to thwart a takeover by Microsoft Corp. The lawsuit was filed in Delaware Chancery Court on Thursday by lawyers representing Detroit's police and fire retirement system and general retirement system, as well as 'all other similarly situated public shareholders.'"
Lovely, some short term investors would liek to crack open the golden goose and get allt he eggs now. Which may not be a bad idea (I can't imagine Yahoo!'s share price going up very significantly unless they have something very surprising in the works. If I was a shareholder I'd probably want to sue them too, but I'd feel dirty about it (but rolling around in money would probably cure that).
Everyone is greedy, by and large. Get over it. Most of us are. In the long run, both sides are about greed. Yahoo is (presumably) makign the argument that shareholder value will be hurt by the merger and these guys are making the value that it will be hurt by avoiding the takeover. Both sides are greedy, fundamentally.
the managers may feel that they want to take Yahoo in a certain direction not dictated by microsoft, and that is all well and good, but it sounds less noble when you realize that the money they are using to do that is not theirs. It is the money of the tens of thousands of investors in their company that has allowed them to do this. No one is a hero here.
Stocks are a gamble. Period. You agree to contracts that explicitly state this when you start playing the market. You have no guarenteed return on your investment. You could very well lose it all and anyone with stocks Should Know This.
If you want a sure thing, get a Treasury Bond and STFU.
you mean the fund managers. unfortunately nothing will happen to them it's people retirments that will be hurt and these assholes will roll off into the sunset in their porsches, laughing.
If you mod me down, I will become more powerful than you can imagine....
No, and here's why. The idea isn't that the price is a problem, although it might be for some investors. They feel that any takeover bid from microsoft might be worth more than their stock is liable to be in the near future. They also feel that there are two possible outcomes for their suit. If it is a threat, Yahoo will cave to the deal and they will get their desired price. If it isn't a threat, the markets will not regard it as such and their stock price will not go down.
But....
I don't think that is the whole story. It isn't an insider affair, IMO. What it might be is a hedge against volatility. The only thing better than knowing if your stock will suddenly increase in value is knowing WHEN your stock will suddenly increase in value. If you can force the issue via legal action (iffy) then you can justify the purchase of more shares on the notion that your lawsuit will result in a much higher share price ue to a buyout. So. Large firm sees buyout rebuffed. Large firm sees a chance to reap known profits via legal action. Large firm sues.
I am not suggesting that these firms bought Yahoo in order to bring this lawsuit. What I am suggesting was that it seemed to be a convenient way around future price fluctuations--not an insider job.
Just to avoid the costs of the suit they can get a nice settlement for themselves (aka nuisance value) - and when the deal is as big as this that will be a lot of cash.
Beyond that, they might even be able to win it. Then the lawyers are looking at tens of millions AT LEAST. In the end, the shareholders won't really get anything, but YHOO will pay the fees.
I don't know which of your many posts making the same point to respond to.
"the stock market is simply legalized gambling"
False. The stock market is very *complicated* legalized gambling; there's not much simple about it. And it's only gambling in the same sense as every purchase is. EVERY purchase. Even a bag of chips from the grocery store. It's just got a different risk/reward profile.
The board of directors is chosen to represent the interests of the shareholders. Failure to represent the shareholders is a dereliction in the same sense that a contractor's failure to fix your gas leak, or an auto-mechanic's failure to fix your brakes, or your grocer's failure to accurately represent the "best before" date on your milk, or your employer's failure to pay your wages is a dereliction; all can come to lawsuit.
Lets start with the fact that the market is under valuing yahoo. Compounded with Greedy pension funds that are not financially sound do to miss management, They see prey and pounce.
This is one of the things wrong with wall street.. Build a product get people to invest.. Good they invested... quick pull it all out....
To have someone deny me that chance based on a childish rivalry would really upset me.
There's *so* much more going on here than that.
The most important thing is that Microsoft would destroy the company as it's known now. They'll mess with the back-end technology, swapping in their own, they'll merge some stuff with Windows Live and vice versa, they'll kill anything that's a threat to their desktop hold or they'll limit its prime interoperability to Microsoft products. Features will become dependent on IE and Silverlight.
In short, its goals will go from being a premiere portal and online services company to being anything that can maintain and enhance Microsoft's dominance. Lots of people who work there would rather work for the former than the later (and it *will* hemorrhage key employees if they're bought for that reason). And some of them even have a damn good argument that the company is worth more long term if it serves the former goal. It's not unlikely they'll achieve it, and especially as the desktop becomes less and less relevant, I think they have the potential to outdo Microsoft in terms of their worth.
Short term, of course, you can get quite a good cash-out on the offer MS made... especially compared to anything else available while the markets in general are struggling. And lots of suits and shareholders don't know how to think any other way than short-term gains.
Tweet, tweet.
I hear they are doing horribly.
It seems stupid and ignorant to me that people who don't understand something can see fit to pass judgment on it. SO what exactly qualifies you to make this blanket pronouncement that gambling is the same thing as investing in the stock market? It it your feeling that the absence of a sure thing equals 100% risk? that is what it sounds like.
sure. Markets fluctuate. Countries default on debt. Banks fail. shit happens. When you invest in ANY investment it is always prudent to look at the kind of risk you are willing to accept and the timeline you have to invest. If you need the money on hand 10 years, it might be better to not invest in a group of stocks. If you don't need it for a while and you have a medium tolerance for risk, stocks are a GREAT investment. So good that you would be stupid to ignore them.
Look. The only investment with 0 risk offers a negative rate of return. You suffer little to no risk by putting your money in your mattress. It just will lose value due to inflation. If that is your investment strategy because of the undue risk of other investments, I'm glad I'm not your kids or grandkids.
This is war.
If Yahoo were in serious trouble of, not just ceasing to grow, not just losing some market share in a market that is close to saturated, but of suddenly imploding, it might be important to look at the value the buyer can bring to the table.
But even when we look at the value Microsoft is bringing to the deal, it's in "unspecified" changes to Yahoo's business plan, operating structure, etc. In fact, given Microsoft's history and Yahoo's history and Microsoft's current attitude, this deal cannot be seen as doing anything other than violence to Yahoo.
And that leaves the question of whether a company still under court scrutiny (and theoretical punishment) for monopoly practices should even be looking at expanding in a new market.
Gates, Ballmer, and that bunch have gone powerblind.
Computer memory is just fancy paper, CPUs just fancy pens with fancy erasers; the 'net is just a fancy backyard fence.
FFS.
Gambling doesn't require a house but most of the games we think of do. The reason people aren't usually out there making money on the craps circuit isn't because of the ups and downs. It is because the odds in craps are DESIGNED so that you will never win, on average. The expected value of one dollar played on a craps table over the long run is about 92 cents. In the end, you are losing money. On the contrary, there are games of chance that people do make a living on. Very famously, people have made a living on poker. In this case, the house takes a cut, but it doesn't impact the odds of winning or make it so that the expected value of a dollar in over the long run is less than a dollar out.
I will continue to say that it is ignorant of you to compare gambling to equity finance. Do you understand what portfolio diversification is? It is almost PRECISELY investing in the average stock in order to limit damage to the portfolio due to volatility. You find two investments (or more, really) that will respond differently to a single market change, and you invest a little in both. the ma expected return is lowered, but the variance is lowered even more. It's a fundamental tenet of smart finance and it is nothing like gambling at all.
Are there nonzero risks in the stock market? Sure. If you want to define gambling as taking risks beyond your control with your money than treasury bills are gambling. You said before that the US has never defaulted on its explicit debt and you are correct, but the risk is still there. If you want a risk free investment strategy, take your money and put it in a checking account. It is protected by the FDIC, some even offer a small rate of return, and there is no risk. Of course, you will barely beat inflation and you will forgo 100,000's of dollars worth in lost compounded interest, but it's your money.
I don't want my retirement fund ruining the future market for some short-term gain.
Seriously, I'm wondering if the whole financial world has fallen into the hands of a bunch of maniacs who are so high on _something_ that they don't think they are going to be around next year, not to mention ten or twenty years from now.
Computer memory is just fancy paper, CPUs just fancy pens with fancy erasers; the 'net is just a fancy backyard fence.
There's only one word that has to be applied that blows your whole response away:
Risk.
You said it and you likely know what it means. *Any* amount of risk is a gamble.
Bonds, on the other hand are much less of a risk and are a contract to repay. Municipal bonds are good. I do appreciate what the intent of investment strategies are, but at the end of the day, the core of it is risk. Even if one in ten thousand risks taken goes bad, it's still risk. I just don't see how people can fail to wrap their heads around the concept.
The whole shareholders suing the board of directors has little chance of success and if you ask me (and I know you're not) I'd say this was something started by Microsoft as a means to make any other company that fights back against their will to think twice before refusing their offer. They have a long history of buying other companies out. It usually turns out badly for the other companies. And it seems lately (at last!) people at all levels, from consumers to investors are finally having to face the facts about Microsoft; their practices, their successes, their failures, the road their following and where they are headed.
Microsoft is a dirty player and time and time again it has been shown where they have pulled some very ugly stunts in attempts to get their way. (Need examples? I hope not... but recently, trying to buy votes and manipulate the process surrounding the whole OOXML for ISO mess, the varieties of connections indicating Microsoft funding being behind the SCO lawsuits, and various other anti-competitive behaviors that have been documented in court and other legal documents over the past few years.)
Yahoo would cease to be, everything would be rebranded Microsoft and much of the Yahoo staff would be laid off. Is it any wonder Yahoo would resist this? not to mention losing competitive edge by having to do everything the Microsoft way and avoiding open source.
Everyone here doing what they are supposed to. This lawsuit (and its kind) were expected as soon as yahoo rejected the offer. But the pension plan is doing what they are supposed to as well. When someone offers them $10 for a $6 property, they are supposed to take it. Otherwise, they wouldn't be fulfilling their obligationgs to the pensioneers. The lawsuit will fail if the judge understands that the fact that Yahoo traded at a certain price, doesn't mean that it can be purchased in large amounts at that price. But so far, this is hardly newsworthy.
Any guest worker system is indistinguishable from indentured servitude.
Conflict of interest is the first possible reason which comes to mind.
Scratch the surface, and it might be found that those making or at least influencing the decision turn out to have very strong ties to MS.
It's common for MSFTers to try to dismissing criticism by calling the critics conspiracy theorists and other names. That's a form of flawed logic, called an ad hominem fallacy. Name calling works in the forum of public opinion, but it does not change the underlying facts. In this case, there is a strong possibility of a conflict of interest, regardless of the names the messengers get called.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
Lunacy of the paranoid? Microsoft is a business, not a charity, or a good Samaritan. They're objective to maximize profits and eliminate competition. If you believe anything else, you are a fool.
i feel sorry for yahoo! investors are looking at the short term bottom line. when microsoft succeeds in the yahoo! takeover, i will stop using yahoo! completely. microsoft is not capable of running yahoo! successfully and just doesn't understand what innovation mean. yahoo! on the other hand has sort of lost its way but would certainly do better on its own as long as real leadership could step into the trenches at yahoo!
Probably they could, but the question is if they would. MS appears to be about the advancement of a group and an ideology as much if not more than running an actual business. Based on its demonstrated ideals and values, one could call that MS movement an anti-American political agenda. If it were about profit or technology then MS shareholders could sue over any number of failed initiatives like MS Bob or WinME or Win98. Or about failing to deliver security, performance or even touted features. WinFS has been used in advertising since W95.
Probably the biggest gripe that MS shareholders could have would be constantly treating design flaws and security problems as public relations problems. MS doesn't even do much of its own marketing and lobbying, that's outsourced to the experts. However, these experts do a good job at spinning the design and production failures back onto the customer.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
Yep. With Zimbra, Kolab, and Citadel that makes six. However, the magazines and newspapers don't dare write a word about them, even if they would. In addition to being one of the last remaining advertisers, MS has fifth-columnists working against competition in many places. It's not a conspiracy, just greed and/or politics.
The main reasons people use Exchange is because it is tied into Active Directory exclusively which is tied into their Windows Desktops exclusively. It also tied exclusively into Outlook (which most businesses have due to the Office monopoly), the functionality in Exchange mirrors that for Outlook; they are a perfect lock-in by design. It always comes back to illegally leveragingthe Windows/Office monopoly and vendor lock in.There fixed that for you. It's one aspect near the heart of the 10+ year anti-trust trial MS lost in 2004 and lost in appeal for in 2007.
If Windows or any of the products worked with standards, then it would be possible to swap out components. One reason for the extreme suckitude is that the lock-in guarantees no competition. Old habits die hard and going way back, MS DOS 4 sucked rocks a market for DR-DOS which in turn caused MS-DOS 5 which unlike 4 was usable. Same for the Windows-Outlook-Exchange, except now there is lock-in to such an extent that businesses have to be quite serious about dropping MS and getting into functional products.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
The reality is that the board is overstepping their boundaries and they are doing things that are not in the interest of the Yahoo shareholders.
BS! Now you're making things up. If I were a stockholder of Yahoo! and the board had taken MS's offer I may have sued them because in not demanding a higher price they would have shrugged off their fiducial responsibility to get as good a price as they could. As typically happens an acquirer usually raises their offer when the first offer fails.
FalconShould there be a Law?
... according to the plaintiffs, who allege that Yahoo board members have placed "personal distaste for Microsoft" ahead of shareholder welfare. Anything that goes against shareholder value - say environmental or ethical responsibility - is seen as wrong, according to shareholder bottom-line.