Yahoo shares plunge after Microsoft’s withdrawal
Yahoo’s shares tumbled by as far as 20% Monday morning after talks with Microsoft ended. The Redmond giant increased it’s bid from the original $31/share back in January to $33. Yahoo CEO Jerry Yang reportedly was asking $37; Microsoft walked away from the deal.
It recovered a little bit after end of trading day and was hovering around $24.50, down by $4.25 from last Friday’s $28.75. Some expect that the stock prices could goes down as low as the pre-offer level of about $19.
Yahoo will also be facing lawsuits from shareholders who wanted the deal to go thru. Microsoft, on the other hand, gained 2.6% after the announcement (market was obviously happy MSFT is not overpaying for YHOO). The biggest winner appears to be Google (up by 2.2%) which had a trial search advertising deal with Yahoo a few weeks back.
With the $47.5 billion acquisition fund, Microsoft can actually buy a whole slew of other profitable tech companies.