Bob, awesome analysis. There is one interpretation that doesn't have contradictions, however. Perhaps the board and the management know something about the value of Yahoo assets, or new projects that are in the works that the outside world does not. If this is the case, Microsoft and shareholders would indeed undervalue the company.
If that *is* the case, then Yahoo wouldn't be "grasping at straws" in rejecting this bid... just a thought. Why don't you use your awesome journalism skills to see if it's true?