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Yahoo shareholders sue, Microsoft shuffles

updated 01:45 pm EST, Fri February 15, 2008

Yahoo sued by shareholders

Microsoft's attempted acquisition of Yahoo! has gotten a bit more contentious. Bloomberg reports that a group of Yahoo shareholders have jointly filed a lawsuit against the search company for rejecting the $45 billion offer from Microsoft. Michigan's Wayne County Employees' Retirement System, which owns a relatively small 13,000 block of shares of Yahoo claims in the suit that the company failed to enter into substantial negotiations with Microsoft. "The board of directors is continually evaluating all of its strategic options. Our board believes the Microsoft proposal substantially undervalues Yahoo," Yahoo spokesperson Diana Wong told Bloomberg.

Meanwhile, Microsoft is shuffling executives in its online division in an apparent attempt to better organize for a Yahoo! takeover. Brian McAndrews, the former CEO of the aQuantive digital advertising company (acquired by Microsoft last year), will assume most duties of division head Steve Berkowitz who will leave Microsoft in August.

A Microsoft spokesman told the New York Times that the leadership changes were "unrelated to the Yahoo negotiations, noting that seven other executives were also promoted to senior vice president."

Microsoft also promoted Satya Nadella and Bill Veghte to senior vice president positions. Nadella will sit in a lead engineering role in the online division. Veghte will assume a sales, marketing and strategy role in Windows and Microsoft's online properties.

Yahoo has publicly dismissed Microsoft's $44.6 billion takeover bid, setting the groundwork for a long conflict between the firms. The search firm's Board of Directors says it has unanimously rejected Microsoft's offer after believing that the deal "substantially undervalues" Yahoo's worth. The reputation associated with Yahoo's name, its user base, ad investments and finances are all worth more than what Microsoft has proposed, according to the statement.

Yahoo CEO Jerry Yang subsequently sent a letter to the company's stockholders in an attempt to reassure investors of its stance on the Microsoft deal. Yang claims that Yahoo is positioned to increase its value by around 60-percent by 2010, by emphasizing on its current business model.



By Electronista Staff
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Comments

  1. ender

    Junior Member

    Joined: Mar 1999

    0

    sue?

    So if you don't like the decisions a board of directors makes you should either sell your shares in the company or get enough other shareholders to agree with you so you can elect a new board of directors.

    But a lawsuit? All that does is take value away from the company you have stock in and gives the money to lawyers. And by what legal principle is Yahoo required to "enter substantial negotiations"? Again, if you don't like their decisions, get rid of the board. "Not liking" is not grounds for filing a lawsuit!

  1. mytdave

    Fresh-Faced Recruit

    Joined: Aug 2000

    0

    whole thing bad

    A lawsuit by Michigan's Wayne County Employees' Retirement System may warrant further investigation. Are they getting paid off by someone to file suit?

    Shareholders usually don't have an interest in suing the company whom they're invested in - suits devalue a stock, therefore they're hurting themselves, which would lead me to believe they're getting or being promised a benefit from an (underhanded) 3rd party.

    Yahoo executives are right to rebuff M$. Yahoo will get flushed down the toilet if M$ takes over. I for one will close my Yahoo account if M$ acquires control. But if Yahoo stays independent of M$, I will increase my business with them.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: whole thing bad

    Shareholders usually don't have an interest in suing the company whom they're invested in - suits devalue a stock, therefore they're hurting themselves, which would lead me to believe they're getting or being promised a benefit from an (underhanded) 3rd party.

    Where have you been living? Shareholder lawsuits are a dime a dozen. People file suit against any company for any reason (or do you forget the suits against Apple over things like the back-dating options fiasco).

    And they aren't hurting themselves (as most stockholder suits don't weigh down a company unless it's obvious who'll win), so to think they're being paid off by someone is really a stretch.

    And bear in mind that, in general, stockholders have very little concern of a company's long-term health or prognosis if they can cash in now. That's what's going on here, plain and simple. Stockholder liked the idea of the buyout, as it increased their value of the stock. The Board, who WORK for the stockholders (i.e. they work for the owners of the company) is in business to make money for the stockholders. This suit alleges they aren't living up to their duty.

  1. UberFu

    Fresh-Faced Recruit

    Joined: Oct 2002

    0

    a couple of retirees...

    that didn't bother saving for retirement or stuck all their savings into Yahoo! is going to kill the value of the company they invested in - in hopes they get their cash one way or another because the board at Yahoo! pays attention to Industry and doesn't want the biggest Tech Company on the planet [and stoopidest] to take over and get bigger and more greedy than they already are_

    These idiot retirees need to read up on the tech industry much more than they have before this has a snow balls chance in h*** of being won_

  1. nativeNYer

    Fresh-Faced Recruit

    Joined: Apr 2005

    0

    re: whole bad thing

    "And bear in mind that, in general, stockholders have very little concern of a company's long-term health or prognosis if they can cash in now. That's what's going on here, plain and simple. "

    Absolutely. But I think there is some serious shortsightedness going on here. These shareholders see $$ and are just looking to cash in, to h*** with the long term viability of Yahoo! If these stockholders actually gave two craps about Yahoo, they would be able to figure out that being bought by MS, in the long term, may very well end Yahoo as we know it. So much for that stock.

    CEO Yang and the board are trying to pull together a better deal for the company, rather than sell out to the devil. But these shareholders are just idiots, so they don't understand that.

  1. Peter Bonte

    Fresh-Faced Recruit

    Joined: Aug 2001

    0

    I don't get it

    Stock is about $30 now and the bid from Microsoft is $31 in cash and stock trade. If this price is OK for a shareholder than just go and sell it on the market, the bid from MS isn't that high anymore. MS is bargain hunting and shareholders that want to sell off the whole company are just plain stupid or MS-boys.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: i don't get it

    Stock is about $30 now and the bid from Microsoft is $31 in cash and stock trade.

    The reason the stock is at $30 is because of the bid. MS offered $31, so that sets the value of the stock.

    If this price is OK for a shareholder than just go and sell it on the market, the bid from MS isn't that high anymore.

    Read the article. It states "that the company failed to enter into substantial negotiations with Microsoft.". They're not saying they want MS's offer. But they think, rather than just dismissing it as too low, they should have gone into negotiations to raise the price (like to $40).

    MS is bargain hunting and shareholders that want to sell off the whole company are just plain stupid or MS-boys.

    Bargain hunting? They offered to buy the company at 50% over market value (stock value). The shareholders want MORE. That's not 'stupid', that's good economic sense (would you not want more than the opening offer?).

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: whole bad thing

    Absolutely. But I think there is some serious shortsightedness going on here.

    Of course there is. Since when is the market NOT short-sighted? h***, you all went ranting and raving at the market for letting Apple's price drop $60 because of some near-term not good forecasts.

    These shareholders see $$ and are just looking to cash in, to h*** with the long term viability of Yahoo!

    Right. Just as I explained. That's the joy of becoming a public company. You put lose the control of your company to those who see $$$.

    If these stockholders actually gave two craps about Yahoo, they would be able to figure out that being bought by MS, in the long term, may very well end Yahoo as we know it. So much for that stock.

    Um, maybe you don't understand this. But these stockholders wouldn't be holding onto the stock. They'd be selling it to MS. And, if they're smart, which they probably are, since they're the ones wanting to sell, they'd get rid of the stock once the price was settled.

    Generally speaking, once you dump the stock of a company, you really don't give a c*** what they go off and do.

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