Talk Stock Trading - Financial Market News

Microsoft earnings disappoint as Yahoo deadline looms

by profsilver on April 25th, 2008

Microsoft announced today that their first quarter revenues were pretty flat and profits fell.  Definitely not a good look!  The company’s very public and controversial courting of Yahoo certainly isn’t helping the situation.  Hmmm… “courting” implies consent and this is anything BUT consensual!  

In mergers and acquisitions, shareholders of the acquired company figure they will be paid a premium for their shares, but how much should that premium be?    Enter Microsoft…with a $44 billion offer on the table.  Wow, that’s a really big number.  But according to Yahoo it’s not big enough.  

Yahoo is basking in the glory of beating Wall Street’s estimates for the first quarter.  Revenues are up and profits have quadrupled, bolstering their demands for a higher bid from Microsoft…well, not exactly. 

Sure, it’s a banner quarter, but the long-term outlook (and value) of the company hasn’t really changed.  Furthermore, the huge increase is primarily due to their major stake in a recent IPO and NOT on-going business activities.    Looks like neither company plans to budge before the bid expires (T-minus 21 hours, 45 minutes).  Microsoft may expand its “courting” efforts to include Yahoo’s investors…hope the looming proxy fight doesn’t get too ugly! 

Share This

Related Stories

• Yahoo Courts AOL; Microsoft Declares War
• Microsoft Set to Raise Yahoo Offer?
• Yahoo surprises Wall Street - Does Microsoft care?
• Microsoft: Do You Yahoo?
• Microsoft jumps ship, Yahoo investors follow

POSTED IN: Acquisitions, Earnings, Technology