Yahoo: Financial Plan as Negotiation Tactic
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Written By Sepideh Saremi | March 18, 2008 | Share This
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Yahoo yesterday filed its three-year financial plan from December 2007, detailing expectations of doubled cash flow by 2010 and reiterating that it believes Microsoft’s takeover bid offer of $31/share undervalues Yahoo. But it may be too little, too late, as the economy has taken a bit of a nosedive since December ($2 shares of Bear Stearns, anyone?), making those Yahoo’s financial forecast optimistic. Mashable lays it out nicely:
Unfortunately, they’re forgetting that in December 2007 Dow Jones was some 1500 points higher than it is today, and a lot of crappy things have happened for the US economy in the meantime. Thus, what they predicted last year probably doesn’t hold water anymore; and let’s not forget that they weren’t doing all that well in 2007, either. There’s a reason why Microsoft went with an unsolicited bid - they knew where Yahoo was at and they knew where it was heading.
Yahoo has been trying to fight off Microsoft’s $44.6 billion takeover bid, made at the beginning of February, by engaging in talks with AOL, News Corp, and private firms in efforts to avoid a union with the software giant. CNET notes that part of Yahoo’s presentation to investors detailed its investments in Asia, which are doing very well and Yahoo complains weren’t adequately taken into account when valuing the company. Despite the presentation (or maybe because of its slightly desperate timing), it’s looking more likely that Microsoft will end up owning Yahoo - something that analysts polled by Reuters are still convinced will happen.
More:
- TechCrunch breaks down the numbers in the Yahoo presentation.
- Ashkan Karbasfrooshan details Yahoo’s options.
Topics: Investment, M&A, Microsoft, Yahoo! |