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With a Yahoo Deal Off the Table, Microsoft Can Trade on the Merits
Yesterday's after hours news was just that an agreement between the internet search company
and industry giant Google allowing Yahoo to use its Adsense search and advertising programs, a pact
that could have a possible revenue steam of $800 million in annual sales.
The companies have given three months to allow the feds to review the deal, so there is a small
window of time if Microsoft does really want to pursue Yahoo, though it's probably unlikely it does
so. With the weight of a $44 billion dollar acquisition off its shoulders, Microsoft shares can now
trade on the merits, and it's safe to say that trading at 14x forward earnings is not fair value
that's why fund managers have been accumulating the stock for quite some time. The stock is already
beginning to reflect that sentiment, up $.97, or 3.43%, to $29.21 on top of yesterday's 4% gain.
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