Shares yahoo fall on microsoft aquisition?

Question

during the time when microsoft was bout to aquire yahoo how come shares of yahoo declined? wouldnt it be benefit to yahoo if microsoft purchase at higher share price? how does it work thx

Answer 1

The tender offer was for a ratio of MSFT shares, so if MSFT stock is dropping (b/c their shareholders do not like the deal), then the value to YHOO also drops.  Also there was considerable question about YHOO's boards willingness to go along with the deal, making closure of the deal suspect.  tba

Answer 2

<<<during the time when microsoft was bout to aquire yahoo how come shares of yahoo declined?>>>

There has never been a time Yahoo was about to be acquired by Microsoft.

<<<wouldnt it be benefit to yahoo if microsoft purchase at higher share price?>>>

It would be beneficial economically to Yahoo shareholders, at least in the short term.

<<<how does it work>>>

When one company acquires another, the price has to be high enough to convince shareholders to approve the action. That almost always increases the stock price.

However, when one company makes an offer for a company (or part of a company) and the price is not high enough, the offer is likely to be rejected. In this case, the offer was not high enough to convince most investors that it would be accepted.