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Major Fallout: Yahoo Shareholders, Employees React to Deal's Demise

Posted May 05, 2008 09:22am EDT by Aaron Task in Investing, Internet, Venture Capital, M and A, IPOs

Microsoft's decision Saturday to abandon its effort to acquire Yahoo surprised Wall Street and spurred a lot of angst among major Yahoo shareholders and its employees.

"Had there been a full deal on the table, a hostile deal, at $34 or $35, we would have had to take a look at it," Legg Mason's Bill Miller told The New York Times.

Legg Mason owns about 7% of Yahoo's stock and is the second-largest institutional shareholder, behind Capital Research & Management.

Previously, Miller had defended Yahoo after Steve Ballmer's threat to lower his bid. But Miller's comments this weekend are a rebuke of Yahoo management for overplaying their hand and failing to secure a deal.

There is still a possibility Microsoft may yet return to the table, but Yahoo shareholders are now looking at big losses on a day many thought would be one of big gains.

Yahoo employees find themselves in a similar position and many expressed dismay (off the record, of course) over CEO Jerry Yang's handling of the negotiations, Kara Swisher reports.

85 Comments

n3d5crew
n3d5crew - Monday May 05, 2008 09:35AM EDT

yo son i think elliot spitzer is a hot leaf as a candidate what do you guys think? Bear Sterns? please reply!!!

Jason Leavitt
Jason Leavitt - Monday May 05, 2008 09:47AM EDT

Bravo...MSFT sucks. They don't innovate or create anything. The stock is unchanged over the last 10 years. I would not want to partner with them. Yahoo needs to be broken up into pieces instead of having everything under the same umbrella. Then their value will be fully maximized.

Josh
Josh - Monday May 05, 2008 09:49AM EDT

shareholders of yahoo are getting screwed. There is no way in hell that Yand should get away with using yahoo as his private company and disregarding the shareholders. $33 is better than 23 anyday. Lawsuits will fly and is Yang wants more than why does he not buy out this company or purchase the stock with all the money Yahoo has at this cheap a price. He should go to prison for his stupidity.

Josh
Josh - Monday May 05, 2008 09:50AM EDT

shareholders of yahoo are getting screwed. There is no way in hell that Yand should get away with using yahoo as his private company and disregarding the shareholders. $33 is better than 23 anyday. Lawsuits will fly and is Yang wants more than why does he not buy out this company or purchase the stock with all the money Yahoo has at this cheap a price. He should go to prison for his stupidity.

Josh
Josh - Monday May 05, 2008 09:50AM EDT

shareholders of yahoo are getting screwed. There is no way in hell that Yand should get away with using yahoo as his private company and disregarding the shareholders. $33 is better than 23 anyday. Lawsuits will fly and is Yang wants more than why does he not buy out this company or purchase the stock with all the money Yahoo has at this cheap a price. He should go to prison for his stupidity.

- Monday May 05, 2008 09:56AM EDT

Yeah jerry. I can't wait till msft aquires yahoo for $17 early next year. Things are looking rosy. p.s. I was glad to finally dump my yhoo shares after some one made a bid.

Yahoo! Finance User
Yahoo! Finance User - Monday May 05, 2008 09:56AM EDT

i am a financial advisor and i had a large mutual fund portfolio manager deliver commentary to my investment team. his fund is a large cap growth fund and we talked in length about the microsoft-yahoo deal since they have a very large google position. he was 100% right on target and said microsoft would w/drawal their bid on yahoo and that the deal was nothing but hot air. i have seen him 2x in 3 years and his predictions are extremely accurate. next time i meet, i'll take better notes.

Pam
Pam - Monday May 05, 2008 09:59AM EDT

MSFT split awhile ago and is now at $30, so please get your facts together. I have owned MSFT for several years, I believe it was up around $80 before the split. MSFT does NOT need Jerry's YHOO to be successful...it would have been a win-win situation, but Jerry's ego got caught in the proverbial wringer, and now he has to sweat it out. I see YHOO's stock dropping like the lead bomb it is. YHOO is second at the very best, and not getting that much better....there's a brain drain and this fiasco is adding to it. GET OVER IT, JERRY!

Roman A
Roman A - Monday May 05, 2008 10:04AM EDT

It was Yahoo biggest mistake everrrrrrrrrr.. Shareholders should sue their CEO. I am sure Micrososft would still buy them but for a much lower price

k
k - Monday May 05, 2008 10:05AM EDT

i hope not only yang gets sued but he loses everything. this might end up being the single biggest stockholder screwing since enron.

Sao
Sao - Monday May 05, 2008 10:13AM EDT

Yahoo! is worth alot more than what Microsoft is bargaining for. I believe that, in the short to long term scenerio, Yahoo! will come up on top of all these scrutiny. Given the size and brightness(or uniqeness) of Yahoo!'s employees, Yahoo! has much more advantage over Microsoft and Google in terms of online services scale. I wouldn't mind buying Yahoo! stock and being an employee of their company.

Jason Leavitt
Jason Leavitt - Monday May 05, 2008 10:16AM EDT

Hey Pam K.....MSFT is unchanged over the last 10 years on a split adjusted basis. You would have made more money with a CD at your local bank than investing in MSFT.

Paul L
Paul L - Monday May 05, 2008 10:17AM EDT

Selling Yahoo! Or Not... Jerry will run Yahoo to the ground!!

bob
bob - Monday May 05, 2008 10:17AM EDT

the only person on the planet dumber than yang is me for not selling when the deal was first anounced......how do i get on board for the upcomming lawsuits

Anthony E
Anthony E - Monday May 05, 2008 10:20AM EDT

Wang has to get over his Luke Skywalker against Darth Vader neurosis. He better have an excellent plan B with Google and make a big increase in cash flow or he should be removed. He's living in the past.

riki999
riki999 - Monday May 05, 2008 10:20AM EDT

Jerry i am not from the financial field but i can say one thing what you have done is right in all aspect Microsoft need the domain like yahoo for having good coverage and sales of its basic OS. So what you have done is fine and i appreciate that you have taken good discesion. Some or the other day they will rewart back to you. Make sure to explain this value to all the fellow staff. Wish you all the best and sucess

Bill
Bill - Monday May 05, 2008 10:24AM EDT

Hey!!!! All they are tring to do is get Yahoo stock to drop so they can BUY BUY at a Rock Bottom price, we should be Buying an when it goes up Sell.

anahit
anahit - Monday May 05, 2008 10:24AM EDT

Has anyone seen the movie IDIOCRACY? Jerry should play the starring role. He better pray that the google partnership makes enough click throughs to earn some money. I was in the internet business, when a company relies on other companies for click through cash, that basically means they do not have the power to do it on there own and they are on the way down. I lost cash over this weekend because of his decisions, I hope he feels the heat and doesnt sleep well until the stock comes back up or he resigns. Good Move Dummy.

Yahoo! Finance User
Yahoo! Finance User - Monday May 05, 2008 10:27AM EDT

Nice job Jerry. You think $37. The market thinks $19 - $24. You're not THAT smart. By the way. What have you done lately on the core business front? Search still sucks. Advertising isn't doing much. Music is dominated by someone else. The world's passing you by. Drift lower is my guess. Dead company walking.

Yahoo! Finance User
Yahoo! Finance User - Monday May 05, 2008 10:29AM EDT

Seems to em like we have more short-term traders than we do long-term investors commenting on this. Personally, I believe Yahoo will return considerably more to investors than Microsoft will over the next few years. Unless you need the cash short term, this broken deal is probably a plus for Yahoo *investors*, longer term.

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