If Yahoo and Google merge what would you invest in?

Question

Does it makes sense to invest in Yahoo stock if they are potentially merging with Google, or does Google's stock increase if they merge?

Answer 1

I bought on the rumor, and will sell on the news.

Answer 2

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Answer 3

that won't happen

short yahoo

long google.

Answer 4

Often times, when a company looks to buy out another company, the buyer's stock drops a little, due to the cost of acquisition, etc.  The stock of the target company is often immediately boosted, since a buyout typically comes at a premium.

But in this case it looks less and less likely that Google will buy Yahoo, which is why Yahoo's stock is down so much today.

Answer 5

This would not be a merger of equals. Either a partnership agreement involving no transfer of shares or a buyout by google in stock.

I wouldnt look for this too much though as they might sort some kind of Ad deal out but as far as I can see Google doesnt need yahoo. maybe the asian perentration could be a plus but not by much with Bidu there.

In terms of M&A in this kind of deal yahoo would take a pop up cos of the offer and google an initial hit as I'm fairly certain that it would be popular with google's shareholders.

Just a warning though, Jerry Yang doesnt want to give up control and I cant see Schmidt giving him what he wants in a take over. This point more to the strategic partnership play.

Watch for a proxy battle first though as the MSFT YHOO buyout descision was not unanimous on the board and as a result Icahn will probably take up the proxy battle on this especially since MSFT say they are still happy for the improoved deal to go through

Look at

Answer 6

Don't just go along with what anyone says. But google is a monster that can't stop itself from making money.