2008-09-04 16:39:47
After Turning Down a $33 Per Share Offer in May, Yahoo Management Are Now Feeling the Heat From Shareholders
|
Yahoo shareholders are surely looking on in disbelief as their investment plummets on an almost-daily basis. Thursday was more of the same, as Yahoo traded down another 5.38% to close the session at $17.75. This is the lowest that Yahoo has traded at since September of 2003.
What makes the decline even more painful is the fact that Yahoo management turned down the Microsoft deal just a few short months ago, a deal that would have fetched the company $33 per share. Yahoo management (namely Jerry Yang) balked at the deal, first asking for $38 per share, and then requesting $37 per share. Steve Ballmer, CEO of Microsoft, offered as much as $33 per share for Yahoo (which would have valued the company at around $46 billion dollars) before finally withdrawing his offer.
In early May, Yahoo traded as high as $28.67 in anticipation of a deal getting done between the two companies. Talks were "intensifying" and negotiations were ongoing, however the two sides were still around $3-$4 apart on the price. Eventually Microsoft pulled out of the negotiations, citing the fact that the price was now just too high for the deal to make sense.
Since then, Yahoo has lost almost 40% of its value. They inked a deal with Google that should boost its annual revenues by approximately $800 million dollars, but the clock is still ticking for Jerry Yang. The co-founder and current CEO of Yahoo is going to have an incredibly tough time keeping his job in the years ahead. Many shareholders are angry - a full 34% of shareholders opposed Yang's re-election. Carl Icahn and two former CEOs who are loyal to him, Frank Biondi Jr. and John Chapple, joined Yahoo's board last month.
Things are not looking good for Yahoo shareholders and Jerry Yang. I would be amazed if Yang lasted another two years as CEO of the company. There will be some incredible pressure on him to step down if things don't pick up for the company, and soon.
How would you feel as a Yahoo shareholder, knowing that the company could have accepted a deal for $33 a share just a few months ago? I bet that offer is looking pretty good to many right now - especially the Yahoo management team.
Filed under: General Market News | Internet Companies | Stock Market Scandals
COMMENTS - What Say You?
|
Related Articles
|
|
