From Silicon Alley Insider: As traders wait on the edge of their seats for the latest crumbs of info about the “leanings” of the great Carl Icahn–this morning, it was “leaning toward Yahoo (YHOO) proxy fight”–it’s worth stepping back and looking at the risk/reward here.
Scenario 1: Icahn files board slate, gets Yahoo board fired, and gets Microsoft to agree to buy Yahoo for $33. If this happens, Yahoo’s stock goes to $30-$31 (to await a year of deal purgatory, regulatory clearance, nail-biting Yahoo quarters, nail-biting Microsoft quarters, etc.).
Scenario 2: Icahn doesn’t file board slate but says he’s going to agitate for a merger anyway. If this happens, Yahoo’s stock sinks to $25-ish where it sits until traders figure out whether Icahn generate enough shareholer pressure on Jerry Yang that he sells the company to Microsoft (see Scenario 1).
Scenario 3: Icahn throws up hands in disgust, dumps stock, and walks away. If this happens, stock gradually sinks to low $20s as investors give up hope on quick deal and worry about Yahoo’s performance for the balance of the year.
Most likely? In our opinion, Scenario 2 (with, perhaps, the deke of filing a slate just to get Jerry’s attention)…
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