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Did Yahoo Cause Microsoft's Stock Drop?
Written by Allen Stern - February 10, 2008
Much of the talk this past week has been around Microsoft's drop in share price since they made public their acquisition offer for Yahoo. SAI has a nifty calculator and tonight Techcrunch Editor Mike Arrington calls the deal a "$80 billion Headache". TC notes that the share price of Microsoft has dropped from $32.60 per share on January 31 to $28.56, a ~13% drop.
I agree with Mike that the Yahoo deal might be a factor in the decrease in stock price, but I am not sold that it's the only factor. I am certainly no stock guy (go read Howard Lindzon for that) and will never give stock advice, but I took a look at some other technology companies to see potentially what the market did as a whole during the same time (January 31st - February 8th). Also, check Ashkan's coverage of the deal, it's very thorough.
| Company | Jan 31st Close | February 8th Close | $ Change | ~ % Change |
| Baidu | $279.95 | $233.91 | -$46.04 | -16% |
| $564.30 | $516.69 | -$47.61 | -8% | |
| Apple | $135.56 | $125.48 | -$10.09 | -8% |
| RIM | $93.88 | $89.71 | -$4.17 | -5% |
| IAC | $25.94 | $22.11 | -$3.83 | -12% |
| Nasdaq | 2,389.86 | 2,304.85 | -$85.01 | -3.5% |
What do you think? Is Microsoft stock down because of the Yahoo bid, general market conditions, a combination or neither?
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I would wager when the whole market is dropping people are looking for solid investments and tech is not recession proof. I bet gold is on the up.
Both of course. But tech writers are more concentrated on local fights than global processes.
Microsoft can EASILY pay all cash for Yahoo. http://www.texttechnologies.com/2008/02/10/microsoft-yahoo-cash-deal/
I tried to give an offer to the owner of domain name Microhoo. Here's my e-mail and his reply.
I believe Vikram Gautam is the owner of the domain name.
From: "MicroHoo Vikram Gautam" Add Mobile Alert
To: (e-mail deleted)
Subject: Re: i will pay cash
Date: Sun, 10 Feb 2008 15:21:58 +0530
... You are joking, right. I dont mind if the merger happens or not.
Thanks for your generous offer though.
Regards.
----- Original Message -----
From: (deleted)
To: info@microhoo.com
Sent: Sunday, February 10, 2008 7:15 AM
Subject: i will pay cash
I'll pay you $ 10 dollars for your domain name that best fits my business of selling Microhood and Ovens.
I think this will be the best offer you will have as the planned merger wouldn't push through. Just settle for $ 10 dollars or you could end up losing more money for yearly registration of a name that could be wisely used in selling kitchen products and appliances like Microhood.
I think the cause of these declines is obvious: all of these companies have been hemorrhaging their geek cred over the past several weeks.