msft has been dropping which lowers the value of the bid for yhoo. If there is another bidder yhoo is a good buy here but if not then they both may drop. Is there a good way to play this deal or just avoid it.
msft will continue to drop b/c they will continue to bid for yahoo. and when they do buy, it will jump down as well. i think this would make a very excellent entry point for a very good investment. im not an expert im just trying to apply what i've read and learned....of course i might say stupid things but anyhow heres my opinion: cost of switching, is one of Microsoft's economic moat and advantage that have kept them and will keep them in business for a long long time. Reason microsoft is doing so BAD in the internet business is that well, switching cost is not as significant (typing google.com vs. msn.com, hotmail, gmail) because everything is well do not cost you any actual currency.this is why, the internet industry requires so much emphasis on innovation, user friendly, and something that stands out, failure to be vigilent as you have seen the case with Yahoo, will get you in trouble. Google may stand out as the #1 contender right now, but always keep in mind, the volatile nature of the internet industry, and the virtual zero cost of entrance to this market (facebook, myspace), and the disproportionate value they can bring in a matter of short time and cost. Microsoft will not go under why ? because of diversification. they have fingers in all pies. they dominate the software, corporation solutions, but now with their planned yahoo takeover, attempting to compete with google again. for a crude analogy, if you look at yahoo and google, they do not have their fingers in the some of the pies, well because microsoft owns some of the pies. i dont think all the corps who've been fed mr.gates bullshit would suddenly start using unix or appl, which would mean retraining, reconfiguring infrastructure and so on? also are all the ppl whos using windows are that tech saavy ? they've grown with msft and once again the cost of searching and swithcing to a new platform is costly. yea vista is crap. but haven't windows OS always been crappy? we are now desensitized to it. on a side note, what i think is best for microsoft is purchasing Facebook. imagine turning facebook into a instant messaging program. it will definitely flip the tables b/t google and microsoft.
Here is something interesting: NEWS ALERT from The Wall Street Journal Feb. 9, 2008 Yahoo Inc.'s board plans to reject Microsoft Corp.'s unsolicited $44.6 billion offer to acquire the Web giant, a person familiar with the situation says. After a series of meetings over the past week, Yahoo's board determined that the $31 per share offer "massively undervalues" Yahoo, the person said. It also doesn't account for the risks Yahoo would be taking by entering into an agreement that might be overturned by regulators. The board plans to send a letter to Microsoft on Monday, spelling out its position.
Wasn't that $31 bid a $12 or so premium to where YHOO was trading in the market? If YHOO's board felt the $31 is too low, why weren't they doing massive buy backs of their own shares? Sounds like some posturing for a higher bid to me. I was thinking it was a bad deal for MSFT anyway. BTW, does anyone recall the numbers on that deal that MSFT bot a small piece of facebook for?
i didn't realize msft had a stake in fb? i think facebook would be certainly add wings for microsoft. msft will most likely bid higher, raising alarms at google...perhaps its exactly waht they want google to do....
i think its a tiny stake (<2%) but i think i recall them paying alot for it, giving facebook some crazy valuation. i'll see if i can find it.
YHOO rejected MSFT offer. Now MSFT should surge to about 33. I think buying Feb 30 and 32.5 calls at open on Monday would be a wise trade.