Views On Yahoo Takeover

Interesting post on the yahoo boards please read:

Given that yhoo is in play, a lot can happen.

Regarding short-term, if the current offer of 31 stays for a while without being increased, i would expect yhoo to trade in a range from 27-31. it might even need to test 24/25 if the broader market shows more weakness.

I don't know your personal financial situation, if you use margin, what your time horizon is, how aggressive you are, what other positions you have, etc. but if you have your act together, i think buying yhoo on the dips is not a bad idea. i picked up a little more yesterday at 28.50.

I'm not playing options at all on yhoo. Just a large long position of shares. i've seen too many people lose $$ playing options on yhoo. inst. and HFs are using backspreads and a lot of hedging...which throws off the retail trader who tries to 'read' the option activity for sentiment. i don't recc. it.

As for the merger...that is the BIG question that nobody knows, not yang, not ballmer....yet. msft appears to want this very badly. i also know that yhoo mgmnt would prefer to stay independent, but shareholders may not be patient enough for the turnaround. from my knowledge of yhoo mgmnt and my gut instinct, my best guess is that yhoo will do whatever neccessary to stay independent. it might involve outsourcing search to google, it might involve some other alliance or partnership (maybe a three-way with aapl); and/or yhoo may spin off its investments into a separate entity and give yhoo shareholders shares in the co. and/or a onetime special dividend.

these are the things that are being explored right now.

I can tell you this, silicon valley co.s in general do not want to see yhoo end up with msft. there have been some intersting conversations among SV titans lately...although some of these people are enemies.....they all share a common arch enemy in msft.

whatever happens will happen with the approval of the largest holders. most of them are underwater and frustrated. at some point, they will push the yhoo BOD one way or the other. i'd like to think that the inst. will give jerry one year (6/07 - 6/08) to turn it around before forcing action.

if jerry resists msft's bid, no other bids come, and no goog or other deal materializes, it will go to a proxy fight at the next shareholder meeting in June. msft would be wise to avoid that though, co.s that merge after a proxy fight typically have great trouble intergrating (and lose a lot of key talent along the way).