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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (29992)	2/6/2008 11:48:12 PM
From: Spekulatius	Read Replies (2) of 78676

MSFT , i still own some MSFT (more than a stub) and don't like the bid for Yahoo, but it's too late to sell, IMO. After the bid MSFT lost almost 105 of it's market cap - that's 28B$. Yahoo bid is for 45B$, so if you subtract the lost market cap from the bid you get Yahoo now for 17B$. if you further more subtract the cash and LT investment (a total of 6B$) in yahoo's balance sheet from the remaining 17B$ you get the yahoo business now for a mere 11B$. this is a simplistic way of viewing things, but if you believe that MSFT was worth 300B before the bid they are certainly worth 280B$ now. In my opinion they simply trying to buy Yahoo because they were weakened and they need to bulk up in the internet space to stay inn the game against Yahoo. If the deal get's consumed than the combined Yahoo and MSFT will still only have 1/2 the search market share of GOOG. This will not be enough to threaten GOOG dominance but it will be enough that if GOOG does mistakes, MSFT+YHOO combo could be able to exploit this assuming they have their own house in order.

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