Why doesn't MSFT buy YHOO thru the stockmarket?

Discussion in 'Stocks' started by quantumrock, Feb 1, 2008.

  1. I don't get it. Why offer $31 when it's in the market at $19?? Buffett does that all the time.
  2. dozu888


    it's supply/demand.

    buying all the shares from the open market may not be practical at all. Speculators may front-run and drive price to much higher levels than 31.
  3. Gates should've asked his bestfriend Buffett to broker for him, lol:p
  4. Maybe they did.

    Maybe other companies are in the process of acquiring businesses also.

    News is often late.
  5. They can only get 5% of stock before they have to disclose anyway.
  6. I sense Warren Buffet's influence on this deal. Microsoft management waited until general stock index values are low and the psychology is pessimistic, then they buy a business that represents value to themselves.

    I remember reading that Warren Buffet avoids technology investments but Microsoft management is making this bid. Microsoft management has their own opinions.

    I recall reading words attributed to J. Paul Getty, wonder if he actually said it: "The time to buy is when there is blood in the street." Well maybe people are scared enough now.
  7. I am just speculating, but if MSFT is eying 100% of all YHOO stock then buying through the market (and reducing float) could end up being a lot more expensive than $31.

    Buffet never (?) buys 100% of big public companies. He purchases 5, 6, 10% stakes through the market, over a period of weeks or months in order to limit his impact on price.
  8. I agree; yhoo will never get over $31 on its own; no one has its right mind will purchase it over 31 now; MSFT can call off the deal if it can' t hold its ceiling price on yhoo. great bet to get yhoo; but running yhoo against google is a different story.
  9. This sort of reminds me a HP buying compaq when Dell was king.

    HP did come back after they canned Carly but the whole Compaq thing was a waste of money.

    Ballmer = Fiorina?
  10. It would have taken them years to buy up all the shares and takeover YHOO probably bring the stock price to ~40
    #10     Feb 1, 2008