(pic courtesy: cnet:news.com)
Everyone has heard about the proposed take over of Yahoo by Microsoft. Their repeated increase of their offer price, and Yahoo not giving in. Lots of people predicted yahoo shareholders would be upset, and newspapers reported that Yahoo stock plunged – because they did not take what seemed to be a good offer etc. But did anyone do an accurate calculation, like what Kottke did ?
On Jan 31, the day before Microsoft offered $31/share for Yahoo, YHOO was at $19.18/share (market cap: $26.4 billion) and MSFT was at $32.60/share (market cap: $303.6 billion). At the close of trading today, YHOO closed at $24.37/share (market cap: $33.5 billion) and MSFT was at $29.08/share (market cap: $270.8 billion). In other words, the Microsoft offer increased the value of Yahoo! Inc. by more than $7 billion and decreased the value of Microsoft Corporation by almost $33 billion. In still other words, in attempting to take Yahoo by force, they let an amount equal to Yahoo slip through their fingers. Why isn’t anyone writing about Yahoo’s amazing stock gains and Microsoft’s plunge?
If everyone did, the whole concept of media sensationalism would die ! (and I sure wish it did, after the unfortunate incident of me watching Headline news the other day!)