So a bunch of my friends have been asking me what I think of the Yahoo/Microsoft situation, now that it's over.
As a former Yahoo...
I'm glad Microsoft didn't complete the acquisition. It would have been a bloodbath in multiple ways. The "suicide rate" as people who hate Microsoft with a passion jumped ship would be huge. Then there would have been the inevitable layoffs as competing products were culled, or HR departments were merged, or whatever.
Even my friends who are "unhappy" at Yahoo would not have been happier with their new Microsoft overlords.
Now, as a shareholder?
I have to agree with Bill Miller from Legg Mason (Yahoo's second-largest shareholder). He told the New York Times that if you're going to climb up on the grandstand and say your stock is worth $37.00 a share, and you're sitting on $2.3 Billion in cash reserves, then the absolute smart strategy is to buy back your stock from the market whenever the market is valuing it so far below what you think it's worth.
And if you're NOT buying it back, then how can you honestly say it's worth $37.00 a share?
And if it isn't really worth $37.00 a share, and that's why you're not even willing to pay $24.37 a share for it to buy it back from the open market, then why didn't you accept $33.00 a share for it from the potential buyer?
Shareholders don't care about whether or not people like their new corporate overlords, they care about stock performance.
If Yahoo starts snatching up a crapton of stock from the market, then IMHO, they're putting their money where their mouth is with regard to the stock valuation. If they don't, then that was just a crappy excuse for not selling out to Microsoft, and is an affront to their responsibilities to the shareholders.
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