Posts filed under “Valuation”

Yahoo to Microsoft: No, Thank You

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"They tried to make me go to Redmond, I said, No! No! No!"

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The WSJ is reporting that the Yahoo Board of Directors plans to reject Microsoft unsolicited $44.6 billion offer:

"After a series of meetings over the past week, Yahoo’s board determined that the $31 per share offer "massively undervalues" Yahoo, the person said. It also doesn’t account for the risks Yahoo would be taking by entering into an agreement that might be overturned by regulators. The board plans to send a letter to Microsoft Monday, spelling out its position.

Yahoo’s board believes that Microsoft’s is trying to take advantage of the recent weakness in the company’s share price to "steal" the company. The decision to reject the offer signals that Yahoo’s board is digging in its heels for what could be a long takeover battle. The company is unlikely to consider any offer below $40 per share, the person said…

Yahoo has taken "poison pill" provisions to prevent an unwanted takeover. Microsoft would likely have to oust the board in order to overturn them."

And this isn’t even the news I was referring to yesterday . . .


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Source:
Yahoo Board to Reject Microsoft Bid
MATTHEW KARNITSCHNIG
WSJ, February 9, 2008 5:20 p.m.
http://online.wsj.com/article/SB120257515426256541.html

Category: Corporate Management, M&A, Valuation, Web/Tech

ISM Services Index: Look out below!

One of the themes we have been hearing of late is that stocks, 10% off of their all time highs, are fully reflecting a recession.

That statement turns out to be, um, a tad less than accurate, as was shown by the most recent ISM non-manufacturing Index. Headlines such as Services Data Blindsides Market reveal how little the market actually had priced in even a mild recession, much less a deeper and longer one.

  The ISM’s non-manufacturing
index reflects almost 90% of the economy, according to Bloomberg. Consensus expectations of 53% were dashed, as the index plummeted to ~41.0%. to the lowest level since October 2001. If we exclude 9/11, this was the weakest reading since the data began in 1997.   

In response, all 10 industry groups in the S&P 500 declined, and the Dow dropped 220 points.

Across the board, the data released was surprisingly weak:

Business Activity Index at 41.9% (consistent with a recession historically)
New Orders Index at 43.5%  (fell 10 pts)
Employment Index at 43.9% (An 8 point fall, matching the lowest on record).
Prices Paid remained elevated at 70.7

This is particularly surprising, as we recently learned from the WSJ OpEd pages that The U.S. Economy Is Fine (Really). I haven’t figured out why those pages insist on denying reality, but its their option to live in an alternative universe (Iraq has WMDs, economy is great, etc.)

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Category: Economy, Markets, Valuation

The Flawed Fed Valuation Model

There are lots of things that investors believe which I find perplexing. The Superbowl indicator is one, but the oddest to me is the so-called Fed Model, also known as the IBES Valuation Model. It is not that the Fed model is so terribly wrong — it has been both right and wrong over the…Read More

Category: Data Analysis, Earnings, Fixed Income/Interest Rates, Quantitative, Valuation

Open Thread: Financial Analysts

Category: Finance, Markets, Psychology, Valuation

Financial Sector: More Damage to Come

Category: Derivatives, Real Estate, Taxes and Policy, Valuation

Monoline Insurance: There’s a New Sheriff in Town…

Category: Corporate Management, Credit, Derivatives, M&A, Valuation

Here Comes Another Bubble

Hysterical . . .

via GMSV

Category: Valuation, Video, Web/Tech

Profits vs Cash Flow

Category: Earnings, Economy, Valuation

Goldman Sachs: Sell Tech Selectively

Category: Apprenticed Investor, Corporate Management, Earnings, Technology, Valuation

Subpar Scorecard

Category: Credit, Derivatives, Earnings, Valuation