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Yahoo! Gone in 12 Months?

Posted By Barry Ritholtz On June 19, 2007 @ 11:45 am In Corporate Management,Finance,Financial Press,M&A | Comments Disabled

My friend Paul Kedrosky [1] has some choice quotes in today’s New York Times [2] on the Yahoo management shake-up:

"Some analysts maintain that the shake-up may be only a prelude to a
more substantial corporate overhaul, which could include a merger or a

This had to happen or things would have gotten nasty in a hurry,
with people taking positions and pushing for change,
" said Paul
Kedrosky, executive director of the William J. von Liebig Center for
Entrepreneurism and Technology Advancement at the University of California, San Diego. "I’m not convinced it’s enough, but it had to happen."

You can always tell when an interviewee is media savvy by how they help the reporter set up the story: By giving them a great intro, or a good data point for the middle, or a good ending. Paul did the set up with the quote above, and clinched the ending with the following line:

Mr. Kedrosky added, "My bet: Yahoo won’t be an independent company in 12 months."

Assuming Paul is correct about this — a big "if" — AND assuming the Yahoo takeout is at a premium — a big "and" — then speculators can gamble on both of those issues via Yahoo Leaps:

The January 2009s are trading:

$30 . . . .  $4.2450
. .  $3.2340
. . . .  $2.3250

The January 2010s are trading:

$30 . . . .  $5.65
. . . .  $3.50

Interesting concept for gamblers . . .


Yahoo’s Chief Resigns, and a Founder Takes Over [2]
NYT, June 19, 2007

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2007/06/yahoo-gone-in-12-months/

URLs in this post:

[1] Paul Kedrosky: http://paul.kedrosky.com/

[2] New York Times: http://www.nytimes.com/2007/06/19/technology/19yahoo.html

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