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Patrick
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11 months ago
in Yahoo Shows How The Wall Street Financial System Is Broken on Bob Caswell
Yahoo! board rejected MS offer. Yahoo! board was re-elected, Icahn is now participating on the board. You could maybe argue that given where things are, Icahn does would prefer to play along than sell and take a loss - but as hard as may be for a Microsoftie to admit, it may just be that strategically and financially no one believed the whole deal made any sense and hence Wall Street did work and rejected the deal...
All we knew of strategy was that the benefit from deal was that MS online division would stop losing money. Hard to make any kind of financial forecasts to value NPV of MS stock issued from acquisition ofr that type of strategy and with little detail. So perhaps it was better the devil you know than the devil you know given that you could not see how shareholder value of MS stock would change much with acquisition given lack of detail and so shareholders felt value better maximized with current Yahoo! management...
All we knew of strategy was that the benefit from deal was that MS online division would stop losing money. Hard to make any kind of financial forecasts to value NPV of MS stock issued from acquisition ofr that type of strategy and with little detail. So perhaps it was better the devil you know than the devil you know given that you could not see how shareholder value of MS stock would change much with acquisition given lack of detail and so shareholders felt value better maximized with current Yahoo! management...
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I'm talking about Yahoo shareholders specifically. From the Microsoft perspective, "strategically and financially," as you put it, sure, there are plenty of questions and a whole separate discussion.
But from the Yahoo shareholder perspective, a sale should have happened. This would have maximized shareholder value. And a sale did not happen. Again, if we can claim that Yahoo is still somehow magically maximizing shareholder value by rejecting a $20 billion premium, then we claim that they are maximizing shareholder value regardless of any decision they make (good or bad).
That's a broken system, and that's my point.