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What Happens To The Stock Price If Microsoft Were To Buy Yahoo?

Currently Yahoo is valued at approx $24. As we all know, Microsoft just pulled their offer of approx $37 a share off the table.
Had Yahoo accepted the offer, and I owned yahoo stock valued at $24, would the stock price jump overnight to $37 a share? Or does that money simply change hands behind the scenes with the owners and CEO’s?

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3 Comments

  1. BlaQice
    Posted 2009/07/04 at 5:13 am | Permalink

    Yes, the price would jump to about $36 because now they assume a partial stock deal and since Microsoft would lose about 5%… you’d have to consider that. If it were an all cash deal $37 would be the value.

  2. wa1tjb
    Posted 2009/07/04 at 9:34 am | Permalink

    Well, as you know, Yahoo prices dropped 15% based on the Microsoft withdrawal. Had Microsoft done the deal, Yahoo would have gone up, but probably not to $37. Just because Microsoft is willing to pay that doesn’t mean that the market will value the stock at the same price.

  3. IKE
    Posted 2009/07/04 at 2:32 pm | Permalink

    i belive that the money of 37 a share would just change hands to the owners of yahoo. but if you have shares in yahoo then you would get a fraction of a share in microsoft. so like 10 shares of yahoo you might only get 1 or 2 shares of mircosoft

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