$31 offered, $37 requested

Nah, they were offering $31 a share, Yang wanted $37, the market price rose to $30 anyway, so if the retirement fund wanted to sell their shares they could have simply sold them in the market and got pretty much all of the money.

I didn't see the $40 mentioned in the complaint, (Yang had asked for $37 and MS were not prepared to offer that so it was not on the table)...

What strikes me is that Microsoft were offering less than the price Yahoo was trading at only last year ($33), before the downturn, so it looks like MSFT wanted them on the cheap. If the retirement fund thinks $31 was a good selling price then why didn't it sell when they were $33, it was only last Nov...

the original offer was $40

the $40 offer, or "about $40" to be precise is at the top of page 11 of the pdf

cheers

john

Cool, so they're worth $40 to MS

Yang shouldn't settle for $37 if MS was prepared to pay $40 and Google continues to attack MS's core business. He should have said $50.

Look down the list of top traffic'd sites and MS choices are very very slim. They have no choice and Yahoo doesn't need them to get to $31 a share. i reckon.

So Yahoo don't need the sale and MS do.....they should hold their course.

I'm with Yang...

I'm certainly with Yang here.. It has not gone well for any company that Microsoft purchases. They're also a convicted monopolist, and by trying to buy up all Google's competitors (in search + web advertising at any rate) they are just trying to leverage this to take down Google and gain a monopoly in another market. If Microsoft wants to try to take over, fine, try to buy 50.1% of the stock.

If these investors do not like Yahoo's decisions, don't sue -- they haven't done anything to deflate the price (in fact it's risen ABOVE Microsoft's current offer), so there's not some big loss in stock value to sue over. If ya think Yahoo's fucked up and the stocks going to tumble, sell it now while it's high!

Credit

Yang gets my pat on the back award. Any person willing to stand up to share holders and stick it to the Microsoft man deserves three cheers.

Now if only he hadn't made Yahoo go public in the first place there wouldn't be a problem.

I don't think share holders are a good financial business plan.

@anon coward

I'm not sure that the market is so fluid that if a pension fund decided to divest themselves of all of their holdings in a company, it wouldn't adversely affect the price of their sale.

That is, if YHOO is trading at $30, I can safely assume that I could buy or sell a share at $30. But a pension fund could hold hundreds of thousands of shares. You can't safely assume that if its trading at $30 then I can buy or sell hundreds of thousands of shares at that price. You have to find a buyer (or a seller).

@Power to the people

Kangaroo court. Lynch mob. Guillotine. That's the kind of power the Yahoo share holders will be exercising.

Yahoo refused $40 a year ago. The value to MS went down a lot since then and continues to do so.

Shareholders will want to cash up before the stock turn into toilet paper.

@Nordrick Framelhammer

That's how a publicly traded business works. Just in case you weren't aware.

The person/entity with the most shares get to make the decisions. If you buy the shares up (only possible because shareholders are willing to sell their stake) you win. Full Stop. If you weren't so busy hating MS you would be aware that this type of thing goes on everyday on Wall Street. Get your face out of the PC and look around a bit, it's actually quite nice out here.

Best interest of shareholders or short term speculators? which one?

I am always surprised when I see the phrase "best interest of shareholders" hijacked by short term speculators who don't care about the long term well being of the companies they "invest" in. Do they really invest in the company? The word "invest" shares a stem with the word "vested", it means you are entering into a vested interest. Speculators do not actually do that. They only invest in a short gain scenario, they sell out too soon to be considered to have a vested interest in the company at any point in time. They have an interest, yes, but not a vested interest.

If I look at the large mergers of the last decade, most of them have turned out to be disasters for the long term shareholders. They only ones to benefit from such mega-mergers or takeovers were the speculators, not the long term shareholders. Daimler-Benz lost 10 billion dollars on their adventure swallowing up Chrysler. For that amount of money they could have paid off all the speculators and still fare better as the burden of the merger would not have dragged them down. In the end they decided to get rid of Chrysler again. HP and Compaq is another such story. The combined value of the new company is less than what HP was worth before the merger. HP would likely be more profitable if they hadn't swallowed Compaq. Compaq itself was only up for grabs because they had swallowed DEC before and were unable to digest it.

So, who is to say that a MSFT-YAHOO merger would be a success in the long term. Speculators would make a killing that's for sure, but chances are that long term shareholders would lose out over the next 5-10 years. The IT industry is littered with mergers/acquisitions that destroyed the business of the acquired company and did not produce the expected and promised outcome for the acquiring company. At the same time, the consumer is worse off every time there is one competitor less. Ultimately those mergers erode the competitive landscape and that is not only bad for consumers but also for the competitors themselves.

For these reasons I seriously call into question whether Yahoo's refusal to merge with Microsoft really was against the interest of shareholders. It certainly was not in the interest of speculators. Other than that, this can only be satisfactorily judged a number of years down the road.

Re: not up to Yang

Yes it is. He's in charge.

The reasons for refusing could be so that THE COMPANY continues to exist and be profitable. That is ALL that the executives of a company have to do: ensure they remain profitable. Maximum profit isn't necessary. If you, as an investor, think that you could make more money investing in a more profitable company, sell your shares in Yahoo and buy this more profitable company. Don't drive the company to sell to a competitor just so that that competitor can close the company and make it have ZERO PROFIT just so you can offload your shares at a peak. That isn't profiting from the business, that's selling off assets.

ANYONE can make massive profits by selling off assets. However, you only have so many assets to sell, and you need assets to make profit, so your profit goes down as you sell assets.

Surely if the CEO's job is to maintain profit, he should be able to tell shareholders to stuff it if the actions they want taken will reduce profitability. If not, then his job isn't "maintain profitability", is it, 'cos it can be countermanded by another.

Waste of assets

Long time ago, on my 1st day at Microsoft, we gathered up in a large meeting room to listen to a welcome speech by a Microsoft top manager who used to be a former high-ranked army officer.

Overall, I felt very motivated by his speech, but what really impressed me is the following quote: "Employees are not our most valuable assets, the are our ONLY asset".

Looking at this merger, I don't see Microsoft getting any new assets, because, IMHO - poison pill or not - most of the valuable Yahoo employees will not stick around.

Corporations

This is the problem with business nowdays. The responsibility of the board and CEO IS to achieve maximum profitability (value) for the shareholders, not to simply remain profitable. It is an investment, and as an investor you want max return on your investment. If something can be done to increase return, then it must be done.

I'm not saying I agree with this method, but that's also the reason I wouldn't build a publicly traded company. Private investors providing loans to a company is a different story, as long as you repay at the contracted rate, that's the only obligation you have. Your profitability or value from that point can be whatever you chose, as you have no responsibility of value. Public corporations DO have responsibility of value.

Re: Corporations

No, it;s not that the responsibility of the board and CEO is maximum profitability but that so many people accept their horrendous actions under the misapprehension that this is the requirement.