"No, he doesn't have to maximise existing shareholder value. Yahoo can disperse any obstreperous lawsuit for not getting the maximum existing shareholder value by any number of means, including:
a) it's not in our charter to do that
b) it is against the stated aims
c) maximum current value means severely reduced future performance
After all, maximum EXISTING revenue can be attained by selling off EVERYTHING. Gives a huge influx of current cash. Ongoing revenue? Well, that's not EXISTING value, is it, that's future value.
Your sort of thinking is exactly what makes current corporations an extreme threat to society and is the result of accountants that know nothing but cost."
Unfortunately, you are awfully wrong on all counts.
a) It IS their charter. As a matter of fact, management of a publicly owned company are trustees of the actual owners and they are bound to do what maximises the financial returns of the owners. You may like it or not, but it is their only role, by law.
b) It is not against stated aims, see above. Stated aims are to make money. The most possible money.
c) Maximimizing current value to the detriment of future value is in general indeed an issue. Here, it is not, because there is NO future value. The shareholders cash out. As a consequence, the fact that MICROSOFT's shareholders may lose value because of their future ownership of a crippled Yahoo is not the current owners', and thus the current management's business.
Indeed, it may well be that Microsoft+Yahoo will be worth less merged than not merged. But Yahoo's shareholders will have gotten more cash than they ever could by keeping yahoo independant.
It follows that your point is moot.
On the non numbered part of your post, I never said you had to maximize CURRENT value in general. In fact I very precisely said the opposite in the previous yahoo story. What counts is maximizing the value in the future (in fact, at every point in the future).
Selling off is not always good because it is good only if the cash returned yields better future revenues than keeping the cash invested.
Here, though, it SEEMS to be the case. The offer is high enough that you could take Microsoft's money, invest it safely in low-yielding treasury bonds, and still be better off in 5 years as what Yahoo would have been worth by then (and you'd run much less risk).
As to my sort of thinking, I would ask you to avoid judging what I think when I never uttered a personal opinion in this thread.
I have only been stating facts about the duties of management of a publicly-owned firm.
I certainly didn't say I approved of these legal obligations, just that they existed, and that your not liking them didn't change a thing.
Please refrain from confusing stating something, and approving of it. I acutally don't approve, but denying the facts will not change anything.
And if you don't like me stating it, you only need to read Yang's letter. Do you think he likes the idea of selling his baby to his arch-ennemy? Not one bit. And yet, he acknowledges in his letter that the only thing he can do is fight for maximising his owner's revenues. If he had even the smallest Right to not do so, don't you think he would be more direct to Steve and would tell him exactly what he can do with his offer for the rest of eternity?