Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), General Electric (GE), Viacom (VIA), Comcast Cl’A’ (CMCSA)

Yahoo! (NASDAQ: YHOO) apparently wants to take its time to “mull over other alternatives” to the generous offer from Microsoft (NASDAQ: MSFT). Ya gotta be kidding Yahoo!. Sure, the duty of the board of directors is to weigh in and evaluate all possible offers and business combinations including remaining independent. But in this case Yahoo! had already guided investors and analysts to a challenging year ahead. So, who else would want to buy Yahoo! and why is Yahoo! a difficult purchase?

First, the Microsoft offer: Microsoft is offering $44.6 billion in cash and stock for Yahoo!. The dollar amount is eight times Yahoo!’s sales and a stunning 67 times 2008 consensus earnings of 46 cents per share. Now, you can see why Microsoft’s stock was down 6.6% on Friday after the news was announced. This would be a dilutive transaction for Microsoft and Wall Street has a way of penalizing companies for dilutive deals. But for Microsoft, long term, the transaction could be quite valuable and productive and set it up as a clear number two to giant Google (NASDAQ: GOOG).

Continue reading Yahoo! Ya kidding?

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This entry was posted on Monday, February 4th, 2008 at 5:28 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.