Yahoo will be hit with a financial shock wave following Microsoft’s announcement that it will not further pursue an acquisition of the company. Yahoo stock was down more than 20% or $5.83 to 22.84 in pre-market trading on Monday. The stock had closed at $28.67 on Friday.

Microsoft was up about 2.3% or $0.67 to $29.91. Google, which is one of the likely winners of the failed acquisition process, was up sharply, 3% or $17.91 to $599.20.

Yahoo’s market cap was about $40.01 billion on Friday, well below Microsoft’s final offer of about $47.5 billion. Speculations about lawsuits are already emerging, with Reuters reporting that at least seven law firms will be suing the company. "I think it's pretty hard for the Yahoo board to turn down $33 when they've shown no ability to turn around their stock price," Stuart Grant, managing director at law firm Grant & Eisenhofer, told Reuters. “There's going to be breach of fiduciary duty lawsuits and I must tell you they are looking pretty good right now," he said.

There are rough seas ahead for Yahoo and its co-founder and CEO Jerry Yang. But there is also a good side of the story: Yang now has a chance that Yahoo in fact is worth more than the $47.5 billion Microsoft offered.

Foolish yahoos

May 05, 2008 08:59     

Thats what arrogance and greed gets you.
Pete report abuse vote down vote up Votes: +1

Time for Yang to get yanked

May 05, 2008 09:11     

I wonder how much more of the drivel that Yang keeps spouting about Yahoo being "worth much more than what Microsoft is offering" will the stockholders take before they oust him.... What he says, and what is, are two completely different things in reality. Clearly, with the continual stock decline, the stocktraders already know better.
Waethorn report abuse vote down vote up Votes: +2

Foolish Wall Street

May 05, 2008 13:53     

The price is still higher than it was before the MS bid. Wall Street is out for blood, to hell with profit! Pathetic how we gauge companies these days.
Narg report abuse vote down vote up Votes: -1

It's time for someone to sue the US government for ...

May 06, 2008 01:53     

It's time for someone to sue the US government for allowing "Reuters reporting that at least seven law firms will be suing the company"... Has anyone seen the movie "Interstate 60"? Well, the "Lawyer Town" there is something that gives me goosebumps, literally.
Virtualban report abuse vote down vote up Votes: +0