Why is it that a company's stock increases in value, almost overnight, but not due to company achievements but

Question

potential buyouts? Yahoo doesn't do well in making good business decisions that lead to their stock values increasing, in fact, if their stock value was based strictly on company merits, it would probably be worth as much as a 4-pack of cheap toilet paper, but because Microsoft wants to buy the company, the stock value suddenly increases. Are investors more interested in selling a company they own stock in in order to turn a profit than in the company remaining independent and achieving major accomplishments that would increase the value of their stock?

Yang and his band of cutthroats are out come August 1, and Icahn's Raiders will be the new rulers of yahoo.

Why is it like this?

Answer 1

if you knew that you could sell something to me today for $1 or sell it tomorrow to someone else (Microsoft) for $5, would you really want to sell it to me?