May 4, 2008
The Five Stages of Pundit Grief
"Wow. I'm shocked Yahoo wasn't more reasonable. The stock will probably go down at least $5 on Monday. It is surprising that Ballmer walked away instead of trying a hostile bid at $33," said Walter Price, a senior portfolio manager at RCM fund management company in San Francisco, which had 21 million Microsoft shares and 2 million Yahoo shares as of the end of December.
Ms. [Laura] Martin also had harsh words for Yahooâ€™s managementâ€™s "unbelievable" actions. "This is management putting its employees and its job security ahead of current Yahoo shareholdersâ€™ interest,â€ she told the news service. She also told Reuters that she expects several shareholders lawsuits to be filed against the company on Monday.
"Had there been a full deal on the table, a hostile deal, at $34 or $35, we would have had to take a look at it," Bill Miller, a portfolio manager for Legg Mason, told The New York Times. "Our number was higher, but it doesnâ€™t mean we would have rejected it."
Microsoftâ€™s disappointing numbers, which sent its stock down 4.5 percent in after-hours trading, will only put pressure on the software behemoth to raise its bid.
On Wednesday, Steve â€“ as in Steven Ballmer, Microsoftâ€™s chief executive â€“ cavalierly suggested that the company doesn't need Yahoo and can go it alone. (That's untrue, by the way. If Mr. Ballmer doesn't win Yahoo, his failure will be seen as a major management blunder, and shareholders could raise questions about his leadership.) He has also threatened to start a proxy contest by this Saturday unless Yahoo reaches a deal with them.
But Mr. Ballmer's tough talk now appears to be pure bluster ahead of what he knew was going to be a bad quarter.
"We believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," Ballmer said in a statement.