For those of you that have been on my email distribution list prior to the launch of Logical Decisions, you might remember my April 25th comments on Yahoo. Those that are new to my work, here is what I said, "Speaking of deals, if you haven't sold your yahoo stock, today is the day, as the Microsoft friendly offer expires Saturday. If nothing happens, the deal is dead, Yahoo's price likely falls to pre-deal levels under 18, and Ballmer gets to get hostile, and buy shares in the open market for possibly half his announced offer price. If this hallucination actually happens and Yahoo drops toward 10-14, it becomes an interesting play, since an open market race to buy control will likely develop.”
Well, the deal expired, and you can no longer sell your Yahoo stock at 28, like was available that day. Yes, there was a few hours of emotion between now and then with prices between 28 and 30, but few took advantage of “getting’ when the getting’ was good”. Today, Yahoo and Microsoft announced that they had ended their talks and NO DEAL would be coming. The stock fell immediately from 26 to 23, and closed near that low. My comments from April stand; expect Yahoo to decline under 18, eventually toward 10-14. Since you can never play these kinds of deals perfectly, 19 would be the place to begin a position, adding at 16, 13, and 10. With that plan and a perspective of 2 to 4 years, it’s hard to imagine a losing outcome.
For what it's worth,
Ken
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment