Yahoo shares take a tumble
Company falters after Microsoft withdraws bid
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Yang, under pressure from shareholders, cast his company as the spurned lover, suggesting he was still ready to make a deal "but they walked."
If Microsoft returned with a "real offer and a real proposal," Yang said, "we would be happy to listen."
Several hours after meeting with Yang and Yahoo co-founder David Filo in Seattle on Saturday, Microsoft chief exec Steve Ballmer called the deal off, then went public with his kiss-off letter. Ballmer noted Microsoft had sweetened its bid to $33 per share, but Yahoo wouldn't go lower than $37 per share, an increase that would add an extra $5 billion to the pricetag. Ballmer also ruled out a hostile takeover due to concerns over potential Yahoo alliances with Google.
Yahoo stock took a beating on Monday, but not as badly as some analysts had anticipated, due to a pervasive belief that the deal would eventually be consummated. Should Yahoo's shares decline far enough, the thinking goes, Microsoft will swoop in and buy the company, likely at a lower price.
Yahoo shares dropped 15% to $24.37 at market close. The $4.30 drop wiped out nearly half the gain Yahoo shares had made since Microsoft made its unsolicited bid three months ago.
Microsoft shares, meanwhile, fell 16¢ to $29.08 Monday. Its shares had been expected to rise due to Wall Street concerns about the deal.
Monday's backlash turned up the heat on Yang and the rest of Yahoo's board, which unanimously rebuffed Microsoft. Shareholder dissatisfaction could make for a rambunctious annual meeting, which must take place by mid-July.
Google came out ahead following the withdrawn bid: Not only did it avoid two large competitors joining forces, it notched a $13.61 per share gain, or 2.3%, to close at $594.90 Monday.
The failed bid could prove a boon to Time Warner, which has been trying to offload its struggling AOL unit, and other Netcos that Microsoft might ally with as it tries to ramp up its online ad biz. Microsoft's online division lost $745 million through the first nine months of the company's fiscal year.
(The Associated Press contributed to this report.)
