Destruction of YHOO Shareholder Value Impressively Well Realized
Yahoo’s attempts to rally shareholders in advance of its annual meeting on Aug. 1 are going about as well as its attempts to rally its business. Which is to say, not well at all.
In a regulatory filing urging shareholders to vote for its incumbent board of directors at the upcoming annual meeting, Yahoo (YHOO)
characterized Microsoft’s (MSFT) position throughout the two companies’ acquisition talks as “unresponsive and inconsistent.”
Which is ironic, because the same can be said of Yahoo’s turnaround strategy and its share price as well. Yahoo’s shares were trading at $19.18 the day before Microsoft announced its $31-per-share bid for the company. Six months later they’re trading at $19.65, not 50 cents from where they started.
“We know what Yahoo’s worth,” Microsoft CEO Steve Ballmer said back in April. “$44 billion is a lot of money. If Yahoo’s shareholders like it, that’s great. We are prepared to go forward without a merger with Yahoo. … Time is money.”
It certainly is.
Comments
I think that one of the most important, albiet least discussed aspect of this disaster is the role played by Microsoft’s own employees in derailing it. While it might be too strong to characterize what happened as a “mutiny,” it was clear after an all-hands meeting on May 1 that there was deep unhappiness at MSFT about the integration challenges faced by the acquisition, the cost-benefit equasion, and perhaps fear as to the impact on MSFT’s own share price. At this point Yahoo’s coyness wore out its welcome, and Ballmer decided to walk away, realizing that Yahoo’s adolescent recalcitrance was actually a tremendous blessing in disguise.
Posted by Steve Baldwin at July 1st, 2008 at 10:12 amAs Yahoo’s “leaders” continue to look back and attempt to justify themselves, the stock will probably sink even further. What’s really needed John is a companion piece, written by you and called “Destruction of MSFT Shareholder Value Impressively Well Realized!” I believe MSFT hit 35+ on the day Ballmer announced this “deal.” While I’m glad he finally crawled away from this ill-conceived purchase, - my own MSFT shareholder votes won’t be for him.
Posted by Jeff Fields at July 1st, 2008 at 1:11 pmI feel Microsoft is the winner in this failed bid, while yahoo shareholders are the losers. Yahoo and Microsoft are both slowly bleeding market share and it now appears irreversible. Microsoft thought they could realize some new marketing muscle with their market share doubled but it wouldn’t have stopped the bleeding. You can’t buy yourself out of a lack of marketing and tech prowess. It would have been what AOL was for Time/Warner. In that same way, Yahoo shareholders would have benefited much as AOL shareholders benefited at the expense of Time/Warner, and yet Yahoo’s arrogant, stupid, egotistical mismanagement instead gave Microsoft a gift. Now, they’re trying to convince their shareholders that their mismanagement is the right path? That’s adding insult to injury. Yang to shareholders: Hey, all you idiots, here’s my new plan. I look forward to my next bonus, but we’ll save that for another shareholder meeting.
Posted by Thku Forgrace at July 1st, 2008 at 7:37 pm