Yahoo.One of the largest search engines and internet portals.
The mentioned deal with Microsoft was most probably cancelled as Microsoft rejected to pay more than 33 USD per share a revised offer from 31 USD per share but less than 37 USd per share Yahoo aimed for.
So was 37 Dollars per share too expensinve for Yahoo valuation up almost 28% from last Friday’s closing price of 29 USD?Did Microsoft consider it was not willing to pay more money than was Yahoo was really worth?Most probably yes.
If an investor make s a research at MSN money wizars looking for the true intrinsic value of Yahoo he or she will se that its intrinsic price is about 20 USD less than 33% that Yahoo is selling for today.Of course this valuation is by no means an ultimate one or a point of reference but is indicative of what analysis and points of judgement can be made.
Now if it good news or bad that the deal is off for Yahoo?It depends.But in most cases chances are it is bad news as Microsoft estimated that there are limits to pay and even if the real price of Yahoo was more than 37 USD per share then it would not want to reveal it to the market.Of course in trading the real intrinsic value is hard to estimate but the amrket finds its way to revert to it if it is far below or far above it.So a reaction on Monday will indicate what most people think of.Chances are it will be a negative reaction with a downward pressure on Yahoo stock price as it may be considered by other overpriced and unreasonable in its demands.
Yahoo! Finance : http://biz.yahoo.com/ap/080505/microsoft_yahoo.html
