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Earlier quoted context omitted.
see for yourself http://finance.google.com/finance?q=yahoo
What this stock price says to me is that investors are betting that this story, even if it's correct, is not the last word, and that Microsoft (or someone) will eventually get them.
"the $31 per share offer "massively undervalues" Yahoo," Now I'm no mathematician, but when microsoft made that offer, I believe their stock closed at 19.10, which I believe is significantly less than $31. The mere offer from microsoft caused their value to jump 50% in a day. Monday might be ugly for YHOO owners.
Yahoo stock is trading around $29 a share, yet Yahoo's board say that Microsoft's offer of $31 a share "massively undervalues" the company?
Yahoo stock is trading around $29 a share, yet Yahoo's board say that Microsoft's offer of $31 a share "massively undervalues" the company?
Sure, that is quite plausible. The current market capitalization / stock price of a company is not the final word on a company's value. Whether it is true or not is another question, but it is certainly possible that Yahoo is undervalued by the MSFT offer.
"Massively Undervalues" huh... Let's see, a stock price of under $20/share previous to the $31/share offer being made. A greater than 50% premium is massively undervaluing the company? Granted the market is not a perfect indicator of true value of a company. Google was a good example of this when they were valued at around $100/share and then proceeded to quadruple in value over the next 2 years. However, Yahoo is no…
"the $31 per share offer "massively undervalues" Yahoo," Now I'm no mathematician, but when microsoft made that offer, I believe their stock closed at 19.10, which I believe is significantly less than $31. The mere offer from microsoft caused their value to jump 50% in a day. Monday might be ugly for YHOO owners.
Many people believe that Yahoo is massively undervalued on Wall Street.
I hope this definitively kills Micro$oft.
"Massively Undervalues" huh... Let's see, a stock price of under $20/share previous to the $31/share offer being made. A greater than 50% premium is massively undervaluing the company? Granted the market is not a perfect indicator of true value of a company. Google was a good example of this when they were valued at around $100/share and then proceeded to quadruple in value over the next 2 years. However, Yahoo is no…
Yahoo is undoubtedly going through a rough time in terms of their share price, but what's being forgotten is past performance. Since the beginning of 2007 Yahoo's share price has averaged around $25 or so, with a low of $22.73 and a high of $33.63. The pre-bid low this year was $19.05, and was probably due to the fact that the majority of the industry was taking a beating, along with the rest of the economy.
When companies offer takeovers, they usually pay a premium in share price, however Microsoft took advantage of the state of the economy by offering a takeover at a particularly low point in share price, allowing them to offer an artificial premium that was - when compared to YHOO average share price - at only a $5 premium, or 20%.
If $29 per share massively undervalues Yahoo, wouldn't Yahoo have spent the last two years buying back huge amounts of its own stock?