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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).
IANAL.
My take is that shareholder lawsuits are never a given in this country. There is a good possiblity that Yahoo will just show in court that their managerial view of the long view showed greater long term shareholder value in avoiding the merger. there is a good possibility that the suit might be dismissed on face. However, this doesn't always happen. If these investors are large enough, or find other plaintiffs who are, the mere public pressure of the suit could pressure the Yahoo board to do a few possible things:
1. Make a deal with microsoft to put it up to a vote of shareholders.
2. Just go ahead with the deal anyways.
I can't remember the last time a lawsuit like this went through off the top of my head. But I know that the record on them is not completely one-sided. I'll do some digging and be back
If I were a Yahoo shareholder, I'd be excited to be able to convert that into Microsoft stock. To have someone deny me that chance based on a childish rivalry would really upset me.
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.
What Yahoo management can do is thwart Microsoft by making it too expensive to buy up all the shares. Such a tactic is called a poison pill:
http://en.wikipedia.org/wiki/Poison_pill
The bottom line seems to be that, if Microsoft is determined, Yahoo's management probably can't prevent a takeover unless some other buyer is more determined and has deeper pockets.
There is no retirement fund in the world that should be invested in Yahoo. Retirement people...when you are nearing retirement age you want to have little to no risk. Nobody will be losing any money in their golden years because of this except the idiots that put the money there in the first place.
This is more likely a long term outlook 'retirement fund'...a pair of funds that right now are in their 'high risk' or 'moderate risk' spans of time. The folks putting in to these funds right now should be in their 20's to 40's. A small hiccup now is not going to be a major factor 30+ years from now...these idiots are just trying to sue their mistakes away because they've already made too many poor investments.
Who is this that even the wind and the waves obey Him? Surely this computer must submit also!
True. Stocks are a gamble. However, as these Funds likely have Class B common stock, which provides them with ownership and voting rights, they are demonstrably justified in wanting to file a suit primarily due to the fact that the decision to "spurn Microsoft" is a decision for the OWNERS, not the MANAGERS left in control.
(here's why economists should only be allowed one arm...) But on the other hand, thus the problem with Agency.
"I have an offer you can't refuse"
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....
Stocks are not guarenteed investments. People invest in it because they believe the price will go up, but have no recourse if it doesn't.
Those poor schmucks that dove into Blackstone at $40/share when it went public probably wish they could sue now that it's down to $15. (Yea, it "opened" at $34 but not to the general public. When the market opened to the public, it bolted up to $40, been going down ever since.)
This is why stocks are risky investments. They're not guarenteed and not insured. You can lose money. If you want a sure thing, invest in Treasury Bonds.
I am probably a minority here, but as a yahoo shareholder, I for one support the merger. From a stock holder's perspective -- this is the only way. The stock, prior to the merger announcement was trading at a paltry 20 dollars a share, and had a jump of 50% to 30 a share after the merger was announced. Yahoo's loosing its traditional bread and butter: being a search engine. And with that onslaught all the other yahoo online properties are slowly loosing market share...
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 am a lousy speller"
Yew herd I.T. hear forth.
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....
Are you a treasury bond trader? Who qualified you to make all of these remarks? Stocks are perfectly reasonable investments if you understand what your willingness to accept risk is and if you diversify your holdings. If you want safe, don't even get treasury bonds, I hear some checking accounts give interest now.
Treasury bonds offer a rate of return that is on average much, much lower than the stock market or even the corporate bond market. That is partially because they are lower risk investments. they serve a great role (as do corporate and municipal bonds) for medium term investments because they give a relatively known and fixed return for low risk. for a long term investment, they should now be the majority of your portfolio. You just won't break 3% after transactions costs. Compare a fund investing for 30 years at 3% with one investing at 6%. After 30 someodd years, the 3% portfolio will have roughly doubled, but the 6% portfolio will have increased by ~6 times. That's a pretty significant difference.
Just because you lost money on stocks doesn't mean that they are bad for everyone, always. Sheesh.
Here in Michigan, we have a term for things like this.
Yahoo just got "Detroited."
The myth of shareholder primacy
Granted, this is about Australian law, but American law isn't substantially different. Microsoft want to swallow up Yahoo. The company would no longer exist. It's relevant.
Pension funds have lots of constituents at differing points in their life. They have to pay out money to pensioners who have already retired, and they have to make sure there is enough money to pay out those people who will be retiring 5, 10 or 20 years from now. Thus they do have to worry about growing their funds size, which makes growth companies like Yahoo worthwhile investments. While I agree with you that Yahoo itself is a rather horrible investment, there is no way that a pension fund would be able to keep up with growth targets by just investing in Altria, Pfizer, and Proctor & Gamble.
The sun beams down on a brand new day, No more welfare tax to pay, Unsightly slums gone up in flashing light...
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.
"This is why stocks are risky investments. They're not guarenteed and not insured. You can lose money. If you want a sure thing, invest in Treasury Bonds."
You can lose money in bonds too, even treasury ones. If whoever is in charge of printing money decides to print a lot more of it after you buy the bond, your future buying power is diluted and so the trading price of the bond can go down significantly, especially with long term bonds.
If I have seen further it is by stealing the Intellectual Property of giants.
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.)
s/people/lawyers/
my password really is 'stinkypants'
Here is a MicroHoo related stories box at MSNBC @ http://www.msnbc.msn.com/id/23237868/
Microsoft: Yahoo would stay in Silicon Valley
Microsoft bid 'unnerving' to Google co-founder
Analysis: Microsoft will win proxy battle
Microsoft to authorize Yahoo proxy battle
Gates: Microsoft's offer to Yahoo is fair
Yahoo's big investors may back Microsoft
Yahoo's CEO explains Microsoft rebuttal
Newsweek: Why this deal won't happen
Why Google will remain king of search
Vote: Can Microsoft-Yahoo beat Google?
Guess which link doesn't work?
Newsweek: Why this deal won't happen
Page not found Our web servers cannot find the page or file you asked for. The link you followed may be broken or expired.
http://www.newsweek.com/id/110796 Nope not expired, guess it was just misplaced.
Oddly enough this link works fine Why Google will remain king of search I guess it was left to show that there are no antitrust issues.
On the story itself
The company also adopted new severance packages that would protect employees in the event of a Microsoft takeover, a move the lawsuit labels as a blatant effort to drive up the cost of an acquisition.
It couldn't be an attempt to protect their employees, nah what does that have to do with profits?
The company said in a Securities and Exchange Commission filing Tuesday that workers who lose their jobs without "cause" or quit "for good reason," as Yahoo defines it, would continue to receive their salary and medical benefits for four to 24 months, plus reimbursement for "outplacement services" for two years. A Yahoo spokeswoman would not say what might constitute good reason.
I dunno, how about: I was purchased by a soul crushing monopolist.
OSGGFG - Open Source Gamers Guide to Free Games
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.
1. Yahoo stockholders sue yahoo.
2. Microsoft buys yahoo stocks.
3. Yahoo stock goes up.
4. Desperate stockholders sell
5. Yahoo stock plummets.
6. Microsoft loses millions in stocks.
7. ????
8. Profit!
Copyright infringement is "piracy" in the same way DRM is "consumer rape"
It's a regular expression. In a nutshell:
s/ORIGINAL/REPLACEMENT/
For a given text with that applied, the string "ORIGINAL" is replaced by "REPLACEMENT". There's more to it, but that's all you need to get the joke.
Here's the Perldoc page on them, if you're interested.
http://wsulug.org
It's more than a case of killing the goose that lays the golden eggs. Gatesists made clear that they would not take "no" for an answer and would continue their plans against Yahoo one way or another. These so-called pension funds are likely part of that approach and just softening up Yahoo, while setting the media against the board in prep for its ousting. One point which is unlikely to ever make many mainstream news sites or forums, even open source ones like Slashdot, is that Microsoftologians are likely to try to replace Yahoo's board. Poisoning the press against the board is a first step.
Later, preventing the Yahoo employees from jumping off with golden parachutes might be a repeat of what MS did to Borland, except against key open source projects. Yahoo contributes in a big way to many open source projects, PHP and BSD being two Very Important (tm) ones. Getting Yahoo would crush a competitor to the spectacularly failed MSN. So without the 'chutes many would have to stay and MS could simply have them sweeping floors or making coffee.
There is also the question of Zimbra, which was recently purchased by Yahoo. MS Exchange is about the only thing that ties Windows into either/both the desktop and the server room. Zimbra is one of the few competitors to MS Exchange, besides Kolab and Citadel, none of which get much press. Quite a few shops would stop or drastically decrease use of MS products without MS Exchange. Zimbra is currently not GPL. Buying Yahoo would allow Zimbra to be put on ice as MS did with FoxPro
Advertising, aka tracking users, is another problem. MS execs want into advertising. Controlling the adservers allows a chance, finally, at income. It also allows access to be tweaked. Ads get served up first before content and delay, especially at the beginning, drastically reduces viewing time and thus mindshare. The first moments are crucial and studies show that the cap is set at 20s. A delay, on purpose or by accident, of even a fifth of a second x one million page views is hundreds of lost viewing hours. So the potential for severe abuse is there in addition to the technical problems MS services and servers are known for.
At the bottom is also a question of money. Many articles somehow neglect that much of the initial offer was funny-money, aka MSFT stock, which MS prints on demand. The noise and smoke about the attempted take over does well at drawing attention away from what must be some rather 'creative' book keeping there in Redmond.
There are plenty more possible reasons to go after Yahoo's board. Having sockpuppets poison the press makes sense for many of them.
Beta is broken and the link to classic doesn't work. Stop wasting our time or there won't be anybody left here.
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.
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!
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.
I admit I may be mistaken here but I was always convinced that the purpose of shares existing in the first place was to have a possibility of shared ownership for many indihviduals.
It's understandable but you're wrong. The original purpose of issuing shares in a corporation, and the purpose of the corporation itself, was to limit liability. Corporate Charters were first issued to limit the liability of investors to just what they invested in the corporation. The first two corporate charters were granted to the Dutch East India Company in 1602 and the Honourable East India Company in 1604. Both were trading companies involved in shipping products between India and Europe and shipping was an expensive operation. If a ship sank or was attacked by pirates not only did the owners lose the ship but they also had to pay for the loss of the cargo and the loss of the lives. If a small investor had invested money in a ship they could lose everything they owned, even their own home. The Dutch then the British granted charters to corporations to limit the liability of small investors. If a ship was lost the most an investor could lose is the amount of money they invested. However what has been overlooked in all of this was that corporate charters were originally granted if and only if the corporation served the Common good or Public good and when a corporation no longer served these it's charter could be revoked.
FalconShould there be a Law?
Banks aren't any more risk-free than government bonds. Banks can go under and then you are dependant on the government to eventually pay you back. Errors in paperwork can occur, identity fraud happens, etc. And more than that, if you aren't willing to trust a certain government with your money they don't need to default on your bonds. They could just as easily seize banks under their jurisdiction at any time.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
... 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.