“As Yahoo waits in vain for other bidders or deal alternatives to emerge, the dissatisfaction of Microsoft investors with the Yahoo bid has reduced the value of Microsoft’s offer to $29.50 a share,” Henry Blodget reports for Silicon Alley Insider.
“Unless Yahoo shareholders are willing to accept a reduced offer, in other words, Microsoft could soon find itself in a sticky situation: The more Microsoft’s stock drops, the more expensive the deal gets–because the company will have to reset the exchange rate to get the take-out value back to $31 a share. In so doing, it will increase dilution, leaving its existing shareholders holding a smaller percent of the combined company,” Blodget reports.
“Microsoft shareholders are already unhappy with the proposal–and they’re only going to get more unhappy as the deal gets more expensive. The more unhappy they get, the more the stock will drop, and the more the stock drops, the more expensive the deal will get, and so on,” Blodget reports.
Full article here.
Electronista reports, “Despite its large cash reserves, the company’s Chief Finance Officer Chris Liddell acknowledged that the $44.6 billion proposed deal might require that the firm borrow money and accumulate debt. While the $21 billion in reserves owned by the Windows developer would cover nearly all the cash portion of the proposed deal, a loan would help Microsoft avoid wiping out these reserves and leaving itself without options if it needs more cash in the near future, according to the executive.”
Full article here.
John C. Dvorak writes for PC Magazine, “I don’t think this merger would be a wise move for either company. First of all, their product lines are not very complementary. Moreover, the rationale of joining together to better compete with Google looks lame-brained, since neither company seems to have the wherewithal to do anything interesting as of yet. How do two companiesthat do not complement each other and have not shown the ability to be creative in competing with Google expect anything to change? As far as I can tell, this buyout is just throwing away the shareholders’ money, and, to make matters worse, will potentially ruin both companies in the process.”
MacDailyNews Take: Dvorak on his meds?
Dvorak writes, “If Yahoo! accepts this deal, it’s the same as giving up and deciding to take the money and run. The principals of the company have plenty of capital and should reevaluate why they started Yahoo! in the first place. I’m certain that it wasn’t so they could be bought by Microsoft and destroyed in the process. Then again, I’m sure there are a few less-moneyed individuals in the company (and on the board) who are looking to cash out rather than work for a living. It’s a pathetic situation, plain and simple.”
Full article here.
MS will buy Yahoo, then bankrupt both.
If it kills Microsoft, Yahoo is a good trade.
the day I’ve been waiting for Microsoft admits defeat. I’m loving this way too much.
Is this a replay of the “can’t miss” Time Warner/AOL fiasco? Sure hope so. How about we pass the hat – anything to get the bloated, uninovative MS and beleaguered Yahoo to merge more quickly.
first-ever loan..?? No doubt, Bill pulled that off by getting how many millions for vaporware in his early days..??
Go one Microsoft – BUY YAHOO and get into debt!!
Then in 5 years time Microsoft wont exist.
Brilliant move to finally kill the monoploistic mafia.
Microsoft has run out of ideas. The Windows cash cow is in decline, and the Office cash cow will decline along with Windows. Their only success of late has been XBox – and that required an enormous investment and has been beset by product reliability problems (and one assumes enormous warranty costs)…
Forcing people to buy your product might work for a while – but it builds resentment. Microsoft is not well-liked in most corporates – they have been too arrogant, provided terrible service, and charged too much for far too long…
This deal is enough to bring the empire crashing down. If it goes ahead it may fail spectacularly – and if that happens, the Microsoft empire will be broken up and sold off.
Perhaps in as little as 12 months after the deal goes through we could see Microsoft selling “non core assets” to get their costs down. Years of high profits have led to great inefficiencies – watch this space…
Gates chair isn’t even cold yet and monkey boy is throwing it out the window.
OK, Steve B. is mad but he isn’t stupid. The U$ has no value anymore, so the best thing you can do is to buy companies.
However, Steve B. is going to buy the wrong companies.
@It’s About Time: The AOL-Time Warner merger was a fantastic deal for the AOL shareholders who bought Time Warner. It was a horrible deal for the Time Warner shareholders who sold the company.
The way apple stock performing lately leads me to believe some on this board may be needing a loan as well.
Maybe Microsoft can get a loan or grant from the Gates Foundation?
I’ll lend, what the hell, give some of my feces. They can use it as pigment in some of thier products.
Tell MS to fark off. Yahoo, you have the power. Rip their balls out.
@ byronic: Huh? How is the Xbox in any way, shape, or form a success? The division within Microsoft that parents the Xbox has lost over $5bn! An additional $1-2 bn was set aside to cover repairs of the Xbox 360 over the current fiscal year. Without those massive Xbox related losses Microsoft wouldn’t be looking at taking out a loan in order to cover the Yahoo acquisition.
it would be so beautiful and ironic if Microsoft, the Goliath of the computer world, was the maker of it’s own demise! I would laugh!
This is going to be so, so much fun to watch.
– Microsoft going into debt to purchase Yahoo.
– Microsoft struggling to figure out how to integrate the 2 companies.
– Creative people at Yahoo leaving because they don’t want to work for monkey boy.
– Microsoft distracted from improving its cash cow Windows.
– Microsoft not having cash when it needs it for something important.
– Microsoft/Yahoo slowing fading away into the American corporate sunset.
I can see Steve Jobs and Eric Schmidt sitting in the grandstand passing popcorn back and forth while they watch Microsoft destroy not one, but two companies.
If this deal goes through save your Microsoft memorabilia because it will be valuable someday.
“John C. Dvorak writes for PC Magazine, “I don’t think this merger would be a wise move for either company. First of all, their product lines are not very complementary. Moreover, the rationale of joining together to better compete with Google looks lame-brained, since neither company seems to have the wherewithal to do anything interesting as of yet. How do two companies that do not complement each other and have not shown the ability to be creative in competing with Google expect anything to change?”
to be creative in competing with Google? why the extra words?
“How do two companies that do not complement each other and have not shown the ability to be creative.” full stop.
Expect the cost of Windows, Office and XBox to rise to pay for this.
If this goes ahead, Apple will have more cash on hand than MS!
I heard rumour that if MS pulls this off, they’re to pay with Monopoly Money.
“Instant Messaging. Yahoo! and MSN are dominant, and the real competitor is Skype, not GoogleTalk. Rumor has it that Google is going to buy Skype from eBay at a bargain price.”
I wish Apple would buy Skype and merge it into the iPod Touch and iChat. When away from WiFi your calls go to visual voicemail.
Keep the iPhone for cellular calls.
IBM will have the last laugh: Windows 7 to be re-branded OS/7 Warp after the fire sale.
How about some REAL Mac news. This site is a joke. Quicktime gets updated and not even a comment. Acrobat gets updated and again no news. But but we sure get our share of how bad Vista is. I thought this was Mac Daily News. Apparently the News part is only a moniker.
“The way apple stock performing lately leads me to believe some on this board may be needing a loan as well”
Um, yeah, that made NO sense.
1. Microsoft buys Yahoo – goes into debt
2. Both Yahoo and Microsoft continue to lose money
3. Microsoft declares bankruptcy – sell assets
4. Apple buys the Office Suite from MS and Kills the PC version
5. Windows downsizes to only sell Windows – next release is postponed indefinitely
6. The world rejoices
7. Down side – thousands of MS employees are unemployed and now on the street – possibly knocking on Apple’s door