Is the Yahoo Microsoft Deal going to work?

I bought Yahoo stock on Friday and now that the microsoft deal is off I am going to lose big.?

  • My question is should I buy more when the stock gets killed tommorow or just wait it out.Why did yahoo not take this deal.Is the company really worth 37 dollars ???

  • Answer:

    It all depends on what you actually paid for it and how long you plan to keep it. It looks like Friday's range was 27.21 to 29.73 . It looks to me like those prices factor in about a $9 jump due to to the MS offer. It wouldn't surprise me to see them lose that and more on Monday. I'm guessing they did not take the deal because MS still doesn't really seem to "get" the internet yet, just have a look at the MS web site if you don't think I'm right about that. And I'm guessing Yahoo's worth more than $37, but not that much more.

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Not necessarily. One of the reasons I think microsoft pulled out was because they knew that yahoo wasnt going to accept that deal because yahoo thinks it is worth more. It may actually go up on mon. However if it goes down I would def. hold on to it. I think they are definately a company on the rise and you could see the stock go up to 50+ within this year.

Bryce K

The owners know that yahoo increasingly entering the internet surfers, and that surely will grow its business and for this reason they will not sell yahoo.

Roberto Z

I would get out tomorrow to be safe. Many were thinking that if Yahoo couldn't be convinced to take a new bid then Microsoft would go hostile. However, it looks as though Ballmer is giving up on the merger completely and ruled out a hostile takeover. At this point it's unlikely anything will happen to bring these two companies together so the current premium on this stock will disappear. Now you have to look at what Yahoo is really worth as an independent company. When I see it's trading at 37 times earnings and over 40 times future earnings that tells me we should see a major correction downwards this week. If a major sell off does occur you might want to think about selling Monday morning as I already suggested and then buying back in once the dust settles, I'd think about getting back in under $20. Here's another opinion from Seeking Alpha: http://seekingalpha.com/article/75506-yahoo-s-tough-week-ahead?source=wildcard One more for you: http://www.cnbc.com/id/24453760

Mike S

Its depends on what you bought it at. but expect the price on monday to drop in the low 20's like 22-23 a share. Remember when Microsoft originally started this takeover bid yahoo was at $19 a share. So most of the stock's rise was because of this deal.

Mike

that's a sure bet.

mamas mooiste

I would not think so. Microsoft pulling its offer is a ploy to get Yahoo stock holders to raise H*** with management. The offer will come back and my uneducated guess they will strike a deal in the middle like 35. a share . If you cannot risk investing in a stock don't . If you bought the stock on the announcement of the offer the up side is not that great nor is the down side . but unless you played a lot of money why risk it.

P. T

If you bought it at $27 you should love it at $17-$19. -- $17-$19 by Tuesday for obvious reasons. Then back up the following week when MSFT buys them via hostile take over for a premium. PEG is a whopping 2.52 Forward PE of (56.2 / Projected LT Earnings of $22.3) = 2.52 or 100% more than it should be for the industry. So, if Industry Relative PEG is (1.25) (Projected LT Earnings of $22.3) that means PE should be (1.25 x 22.30) = 27.89 and with current earnings of .71/share that means the MAX price should be about $19.80 based on earnings growth of almost 40% a year for a $38billion company that's lost market share for the last five years in a row???? With Google gaining market share quarterly, and with three of the top five destination on the internet (Google, Myspace, Youtube), we conclude the aforementioned projections to border the adbsurd. And $27 outright rediculous. and the $37 they were asking from MSFT, ludicrous... for lack of a better word. My empathy is evident because I know how it must feel when you've built your home from the ground up and share so many memories there and you have an intrinsic value. Although it may have cost you half a mil' you believe it's worth more. But, reality is it's worth what someone is willing to PAY for it. One thing I have learned over the 15 years I've been trading is DON'T BUY THE CAR COMPANY, BUY THE TIRE COMPANY WITH CONTRACTS TO SEVERAL CAR COMPANIES. In this case, buy GOOGLE because they stand to benefit regardless of what happens.

BlaQice

Hello, You may loose a little do to market fluctuation. If you hold yahoo over the long term you should come out ahead. You should consider dollar cost averaging the yahoo. I would keep yahoo only as a long term investment.

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