Microsoft Withdraws Yahoo Bid
May 3rd, 2008 by Shaun Carter
Microsoft CEO Steve Ballmer wrote a letter to Yahoo Co-Founder Jerry Yang formally withdrawing his offer to acquire the search engine for $33 per share, a 70% premium to it’s price before the offer was announced.
Ballmer cited Yahoo’s unwillingness to accept an offer below $37 per share and attempts to cannibalize their own search engine by partnering with Google.
I think Microsoft is wise to back away from this deal and re-double their efforts against Google on their own. This also plays out well for the Yahoo May 25 Puts and MSFT June 32. Yahoo will surely plummet in early trading Monday morning and I think Microsoft will recover nicely into the mid to upper 30’s over the next several weeks.
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