Comments on: Yahoo Says "No Thanks" To Microsoft, For Now http://www.peridotcapitalist.com/2008/02/yahoo-says-no-thanks-to-microsoft-for.html Stock market and investing blog published by Chad Brand, Registered Investment Advisor Mon, 30 Aug 2010 16:40:51 +0000 hourly 1 http://wordpress.org/?v=3.0 By: SiamTwin http://www.peridotcapitalist.com/2008/02/yahoo-says-no-thanks-to-microsoft-for.html/comment-page-1#comment-823 SiamTwin Mon, 11 Feb 2008 16:25:00 +0000 http://www.peridotcapitalist.com/?p=554#comment-823 I agree msft looks interesting here, without yhoo. but my initial take shows the deal is dilutive to earnings for msft, plus it depletes the company's sizeable cash hoard. paying 20+ times ebitda (ex-cash and stakes in asian internet companies alibab and yahoo japan) seems excessive - and then to raise it (especially given execution risks with merger) seems foolish. I agree msft looks interesting here, without yhoo. but my initial take shows the deal is dilutive to earnings for msft, plus it depletes the company’s sizeable cash hoard. paying 20+ times ebitda (ex-cash and stakes in asian internet companies alibab and yahoo japan) seems excessive – and then to raise it (especially given execution risks with merger) seems foolish.

]]> By: Chad Brand http://www.peridotcapitalist.com/2008/02/yahoo-says-no-thanks-to-microsoft-for.html/comment-page-1#comment-822 Chad Brand Mon, 11 Feb 2008 15:00:00 +0000 http://www.peridotcapitalist.com/?p=554#comment-822 I agree with you that there is little chance of competing bids. I don't think YHOO could stay independent and watch their stock go back to 18. So, they are likely just trying to get a little more $ out of MSFT. <br/><br/>I am not suggesting people buy YHOO today. I was assuming YHOO agrees to a MSFT deal at some price, at which time the merger arbs will step in and MSFT shares will see selling as a result. <br/><br/>Of course, the merger arbs could get crushed if the Feds block the deal. I agree with you that there is little chance of competing bids. I don’t think YHOO could stay independent and watch their stock go back to 18. So, they are likely just trying to get a little more $ out of MSFT.

I am not suggesting people buy YHOO today. I was assuming YHOO agrees to a MSFT deal at some price, at which time the merger arbs will step in and MSFT shares will see selling as a result.

Of course, the merger arbs could get crushed if the Feds block the deal.

]]> By: Rubens http://www.peridotcapitalist.com/2008/02/yahoo-says-no-thanks-to-microsoft-for.html/comment-page-1#comment-821 Rubens Mon, 11 Feb 2008 14:55:00 +0000 http://www.peridotcapitalist.com/?p=554#comment-821 I agree that MSFT looks cheap and bought some myself, just too early. But for buying YHOO now, I think it's a tough merger arb play from these levels, with limited upside and big downside. The chances of a competing bid to MSFT's is very low: Google won't bid for antitrust reasons, IAC and News Corp said they are not interested. Who else could bid? Yahoo rejected the bid, but I'm not sure they want a better price or to stay independent. A hostile approach by Microsoft won't work because key employees and executives will probably leave, it's not in Microsoft's interest to go hostile. If Yahoo insists being independent (the wrong thing to do for Yahoo shareholders) the stock can collapse from here. What is your take on this? I agree that MSFT looks cheap and bought some myself, just too early. But for buying YHOO now, I think it’s a tough merger arb play from these levels, with limited upside and big downside. The chances of a competing bid to MSFT’s is very low: Google won’t bid for antitrust reasons, IAC and News Corp said they are not interested. Who else could bid? Yahoo rejected the bid, but I’m not sure they want a better price or to stay independent. A hostile approach by Microsoft won’t work because key employees and executives will probably leave, it’s not in Microsoft’s interest to go hostile. If Yahoo insists being independent (the wrong thing to do for Yahoo shareholders) the stock can collapse from here. What is your take on this?

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