“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.
Do it and kill Microsoft!
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I hope this deal happens. It won’t kill Microsoft, but it will hurt Microsoft very badly. Oh, how I hope this deal happens.
@Sixvodkas
“I heard rumour that if MS pulls this off, they’re to pay with Monopoly Money.”
Close, but the real story is Gates and Ballsmer heard about the Canadian dollar rate. But they accidentally bought Canadian TIRE dollars, and don’t know they now only have a penny on each dollar.
I told them “Go to a bank, NOT a hardware store!”
But did they listen?
“No!”, they said. “Look at all the pink and green bills our U.S. dollars are buying!”, they said.
The rest is history.
I agree with ericdano. If it takes losing Yahoo to do microsoft in, I can live with that. Sucks for Yahoo employees and shareholders, though.
-jcr
While I would love to revel with these glorious postings of MS making a huge mistake and going bankrupt, such a thing will never happen. Remember this is a company who is allowed to continue operating as a Monopoly within the industry. Money will never be an issue with them. It’s guaranteed profits quarter after quarter after quarter.
MS can easily afford to squander a few billion here and there consistently for as long as they are allowed to operate as a monopoly.
Sad to say, but very true.
the best bit is apple got google on board for $0
sometimes you get a lot more than you pay for !!
m$= finished
I wonder what the interest rate is on a $22 billion loan is?
Why a big loan? All MS has to do is help out with a few big fund transfers from Nigeria. I see those opportunities a lot.
> I wonder what the interest rate is on a $22 billion loan is?
At the moment, it’s pretty low and getting lower.
Microsoft obviously wants to distract itself from the mounting Windows fiasco. Windows is what allows Microsoft to waste money on things like Zune and this Yahoo deal. It better start getting some better focus on what’s really important.
I’m with “ericdano”, If it causes MS to lose one of its shirts then by all means, YAHOO!!! (I feel for Yahoo though. On the other hand, even though it’s CEO is a recognized Mac-friendly the company’s product(s) have never been excessively Mac-friendly. Still I’d hate to see them go down just because they got stuck with MS. Of course that’s what usually happens to anyone or any company that gets into bed with MS.)
All I can say for Yahoo is, Good luck with that. If you do go down please be sure to take MS with you. Love, Mr. Peabody
If Microsoft does this and goes into debt, it could be pretty amazing. No more dumbing shitty products into the channel at a loss (Zune, XBOX) for years until they finally squeak in a profit. They will actually have to plan good products, and, as we know, Microsoft is incapable of that. It could pretty much destroy any chance they have of entering other markets and eventually kill them.
>MacDailyNews Take: Dvorak on his meds?
Dvorak is a strange guy. Sometimes, he says things that are utterly insightful and well thought-out. And then in the next article, he can say the dumbest of things.
Apple has nearly as much cash on hand as M$…
I would not have guessed that, even after the Xbox losses.
Good! Let Microsoft buy Yahoo and run it into the ground, thereby wasting their money and hastening the downfall of the Microsoft dinosaur.
what the hell does Mister your potential …our passion have to say about this??? takin ‘ ta U ZT.
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