Tuesday, February 05, 2008
Watching markets work - Was Microsoft's offer to buy Yahoo value-destroying for Microsoft shareholders?
A few days ago, I had written about Microsoft's bid for Yahoo, suggesting that this wasn't such a bright idea for shareholders of Microsoft. Maybe it was better for the board of directors of Microsoft to block such empire-building and just pay out the cash to shareholders. The graph above of intra-day stock prices over the last few days (taken from Yahoo finance; click here for the latest data) shows a striking story. (Click on the graph above to see it more clearly). The Microsoft stock price dropped by ~ 10% in response to the takeover bid while the Yahoo stock price went up by ~ 55%.