Heh...
As Yahoo waits in vain for other bidders or deal alternatives to emerge, the dissatisfaction of Microsoft investors with the Yahoo bid has reduced the value of Microsoft's offer to $29.50 a share.
Why?
- The bid is half-cash / half-stock,
- Microsoft's stock price has dropped about 10% since the offer was announced, and
- the share exchange ratio is fixed at 0.9509 Yahoo shares per Microsoft share
I noticed this trend the day the announcement was made and was surprised that no one was bringing it up. Microsoft's stock went into an almost immediate drop and has not recovered since.
The reason is that Wall Street still thinks Yahoo is a dog. The Yahoo shares went up because the collective mentality was "no one in Yahoo's condition could be stupid enough to pass on this deal". The traders were essentially just buying what they thought was a guaranteed short term profit.
No one is looking to Yahoo for anything long term because the sad truth is that Yahoo is done. They tried competing as a search company, it didn't work. They tried being a media company, it didn't work. They tried being a collection of "Web 2.0" companies, it didn't work. They're out of "trys" at this point and their only hope...is Microsoft.
Every counter offer describes a way to survive independently but none offer the company a chance to prosper. No one even gives that consideration anymore. The truth is their chances are slim even as part of Microsoft. But Microsoft has a mountain of cash and the will to go on which are two things that Yahoo is sorely lacking.