4 ms·

I guess this is part of 'business' that I'll never understand. Why on Earth is it that Yahoo would have to bow down to MS? If you're thinking of the shareholder

by sabat 19y ago

I guess this is part of 'business' that I'll never understand. Why on Earth is it that Yahoo would have to bow down to MS? If you're thinking of the shareholders, wouldn't you be concerned about what MS is going to do to Yahoo (destroy it)? Is it only a (small) gain in share price that matters? Long-term potential be damned?

astine 19y ago
Share holders buy and sell in the short term. However, when Yahoo! stock gets bought by MS, it becomes MS stock. MS stock is worth more (I presume,) so the stock rises in value. Even if MS liquidates everything Yahoo! had, the stock remains MS stock. Stock is a share of the company. It isn't tied to any particular assets.
- pchristensen 19y ago
  When stock is bought, it becomes money. If there's a stock swap, then it becomes MS stock.
  - astine 19y ago
    Yes, I rethought my statement this morning and slapped myself on the head, but by then the edit button had disappeared and didn't feel like replying to myself.
wanorris 19y ago
After years of underperforming, the shareholders saw a chance to take a stock that was selling for under $20 not that long ago and turn it into $33 or $34 a share. If you're scoring at home, that's a 65% or better increase in the value of their investment. And for options holders, there's a good chance that the price change is the difference between the options being underwater (i.e. worthless) and being worth quite a bit. If that were your retirement fund or your stock options in your employer, wouldn't you want that money? And if you were a professional investor, wouldn't you be downright berzerk at all that money being thrown away? Computer geeks like to go around badmouthing Microsoft all the time, but taking that attitude as a CEO or board member of a public company makes you unprofessional and irresponsible. To shareholders, Microsoft's money spends just like everyone else's. Yahoo has underperformed for years. Sure, it has long-term potential. But investors have little reason to think the current management will realize this potential any better than the last couple of regimes. Meanwhile, as much as geeks love to hate Microsoft, they have decades of experience in producing enormous profits, and there's no particular reason to think that buying Yahoo will change that. This isn't just short term vs. long term. This is realizing a return on investment vs. watching that return slip through your fingers. And investors are pissed.
- timr 19y ago
  Here's the thing: if institutional investors truly believed that Yahoo was overplaying a weak hand, they could have sold their holdings at $28/share (or more). These guys were gambling for a few bucks per share, just as much as Jerry Yang and the Yahoo board.
  - pchristensen 19y ago
    They couldn't liquidate hundreds of millions of shares at that price. The more they tried to sell off, the lower the price would go. In the acquisition, all of the shares would be bought at that price.
    - deleted 19y ago
      [deleted]
    - timr 19y ago
      Doesn't matter. If the institutional investors were so brilliantly prescient as to anticipate the failed negotiations, they could have easily profited from the knowledge. They didn't need to liquidate. Hell...simply making a public statement on the deal would have put immense pressure on Yahoo's board to sell. Where were they last week? Point is, this stuff is largely crocodile tears. These guys weren't long because they thought Yahoo would be bought out, they were long because they saw value in the investment. Complaining now that Yahoo's negotiation strategy was somehow "irresponsible", is either massive hindsight bias, or part of some more complicated scheme....
noelchurchill 19y ago
First of all, when/if Microsoft buys Yahoo, some big shareholders wont be shareholders anymore .. they'll be cashed out. Microsoft is offering more per share than the current share price, benefiting shareholders. A MicroHoo has better long term prospects of competing with Google, creating additional long term value for the shareholders.
- Xichekolas 19y ago
  > A MicroHoo has better long term prospects of competing with Google To compete with Google they need brilliant engineers and ideas. Merging isn't going to magically produce those. About the only advantage Microsoft offers Yahoo in this is access to their desktop and a huge pile of cash that allows Yahoo to chase crazy strategies with slim chances of huge payoff, assuming Yahoo has some ideas like that. Yahoo offers Microsoft eyeballs.
  - wheels 19y ago
    Could we stop already with the Google worshiping? Google's days as the break-away nerd company with more brains than bucks have been over for a while. A lot of Google's "brilliant ideas" were actually pioneered at Yahoo and then made their way over to Google (this goes for recent things too). Everybody's trying to be Google's baby, but Yahoo's not exactly been a slouch in internet innovation.
    - Xichekolas 19y ago
      I wasn't in any way trying to claim Google is the end-all-be-all of the Internet either. Sorry if the word 'brilliant' made it seem that way. I wish people would stop assuming that anything that doesn't outright slam Google implies that whoever wrote it is a fanboy. Google has a lead, and usually to overcome a lead by an established player in a market, you need to be brilliant. If you have been around here and sipped some of the startup kool-aid you would know that. I'm not even sure what "being Google's baby" means... but I'm definitely not trying to be one. My point was that simply merging isn't going to magically create ideas and execution (good engineers). All it creates is a distraction, while the two sets of management elbow for position and a ton of employees flee. So maybe MicroHoo doesn't need brilliant ideas and engineers, but it needs some of each, and merging isn't going to create any of either, and will most likely scare away quite a few of the great engineers that both companies already have.

by sabat 19y ago

astine 19y ago

Share holders buy and sell in the short term. However, when Yahoo! stock gets bought by MS, it becomes MS stock. MS stock is worth more (I presume,) so the stock rises in value. Even if MS liquidates everything Yahoo! had, the stock remains MS stock. Stock is a share of the company. It isn't tied to any particular assets.

pchristensen 19y ago
When stock is bought, it becomes money. If there's a stock swap, then it becomes MS stock.
- astine 19y ago
  Yes, I rethought my statement this morning and slapped myself on the head, but by then the edit button had disappeared and didn't feel like replying to myself.

wanorris 19y ago

After years of underperforming, the shareholders saw a chance to take a stock that was selling for under $20 not that long ago and turn it into $33 or $34 a share. If you're scoring at home, that's a 65% or better increase in the value of their investment. And for options holders, there's a good chance that the price change is the difference between the options being underwater (i.e. worthless) and being worth quite a bit. If that were your retirement fund or your stock options in your employer, wouldn't you want that money? And if you were a professional investor, wouldn't you be downright berzerk at all that money being thrown away? Computer geeks like to go around badmouthing Microsoft all the time, but taking that attitude as a CEO or board member of a public company makes you unprofessional and irresponsible. To shareholders, Microsoft's money spends just like everyone else's. Yahoo has underperformed for years. Sure, it has long-term potential. But investors have little reason to think the current management will realize this potential any better than the last couple of regimes. Meanwhile, as much as geeks love to hate Microsoft, they have decades of experience in producing enormous profits, and there's no particular reason to think that buying Yahoo will change that. This isn't just short term vs. long term. This is realizing a return on investment vs. watching that return slip through your fingers. And investors are pissed.

timr 19y ago
Here's the thing: if institutional investors truly believed that Yahoo was overplaying a weak hand, they could have sold their holdings at $28/share (or more). These guys were gambling for a few bucks per share, just as much as Jerry Yang and the Yahoo board.
- pchristensen 19y ago
  They couldn't liquidate hundreds of millions of shares at that price. The more they tried to sell off, the lower the price would go. In the acquisition, all of the shares would be bought at that price.
  - deleted 19y ago
    [deleted]
  - timr 19y ago
    Doesn't matter. If the institutional investors were so brilliantly prescient as to anticipate the failed negotiations, they could have easily profited from the knowledge. They didn't need to liquidate. Hell...simply making a public statement on the deal would have put immense pressure on Yahoo's board to sell. Where were they last week? Point is, this stuff is largely crocodile tears. These guys weren't long because they thought Yahoo would be bought out, they were long because they saw value in the investment. Complaining now that Yahoo's negotiation strategy was somehow "irresponsible", is either massive hindsight bias, or part of some more complicated scheme....

noelchurchill 19y ago

First of all, when/if Microsoft buys Yahoo, some big shareholders wont be shareholders anymore .. they'll be cashed out. Microsoft is offering more per share than the current share price, benefiting shareholders. A MicroHoo has better long term prospects of competing with Google, creating additional long term value for the shareholders.

Xichekolas 19y ago
> A MicroHoo has better long term prospects of competing with Google To compete with Google they need brilliant engineers and ideas. Merging isn't going to magically produce those. About the only advantage Microsoft offers Yahoo in this is access to their desktop and a huge pile of cash that allows Yahoo to chase crazy strategies with slim chances of huge payoff, assuming Yahoo has some ideas like that. Yahoo offers Microsoft eyeballs.
- wheels 19y ago
  Could we stop already with the Google worshiping? Google's days as the break-away nerd company with more brains than bucks have been over for a while. A lot of Google's "brilliant ideas" were actually pioneered at Yahoo and then made their way over to Google (this goes for recent things too). Everybody's trying to be Google's baby, but Yahoo's not exactly been a slouch in internet innovation.
  - Xichekolas 19y ago
    I wasn't in any way trying to claim Google is the end-all-be-all of the Internet either. Sorry if the word 'brilliant' made it seem that way. I wish people would stop assuming that anything that doesn't outright slam Google implies that whoever wrote it is a fanboy. Google has a lead, and usually to overcome a lead by an established player in a market, you need to be brilliant. If you have been around here and sipped some of the startup kool-aid you would know that. I'm not even sure what "being Google's baby" means... but I'm definitely not trying to be one. My point was that simply merging isn't going to magically create ideas and execution (good engineers). All it creates is a distraction, while the two sets of management elbow for position and a ton of employees flee. So maybe MicroHoo doesn't need brilliant ideas and engineers, but it needs some of each, and merging isn't going to create any of either, and will most likely scare away quite a few of the great engineers that both companies already have.