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Did Yahoo Cause Microsoft’s Stock Drop?
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?
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.