I'd hate to be Jerry Yang's therapist today.
The Yahoo CEO turned down a $33 per share buyout offer from Microsoft several months ago, with some saying the price could have gone as high as $37 per share.
But that was then and this is now. The Associated Press is reporting that Yahoo has ended all buyout talks with Microsoft, signaling the end of any deal between the two high tech giants. The reality is that Microsoft walked away from the bargaining table weeks ago and really never came back. Wall Street reacted instinctively and coldly, as Yahoo shares fell 13% in Thursday trading.
Yahoo shares have been none too pleased with Yang's decision to fend off Microsoft, and I'm sure we'll be hearing more from Yahoo investors in the coming days, especially the cantankerous Carl Icahn - a vocal critic of Yang's management style.
Says the AP: "The development, announced Thursday, is expected to lead to an advertising partnership between Yahoo and another rival, Internet search leader Google. That alliance is expected to be announced after the stock market closes."
More on Microchips
In other market news today, a key global microchip group has lowered it growth estimates for the sector in 2008. The news drove the Philadelphia Stock Exchange Microchip Index down 3.4% in today's trading.
Investors should hardly be shocked by the news, as the fallout from high energy prices taking on its toll on the chip sector.
According to the Semiconductor Industry Association (SIA), global chip sales should rise 4.3% to $266.6 billion in 2008, down from a growth forecast of 7.7% issued last November.
The SIA numbers are closer to numbers from other chip analysts. The Gartner Group recently forecast global chip revenue would increase 4.6% to $286.5 billion this year, up from its February estimate of a 3.4% rise.
The SIA also said it expected chip sales to rise at a compound annual growth rate of 6.1% through 2011. In November, it had forecast 7.7% growth for 2007-2010. The SIA reports, not surprisingly, that rising energy prices have dampened consumer discretionary spending, yet folks continue to snap up gadgets, flat-panel TVs and the like.
"The cost of energy is having a huge impact on discretionary spending, but people are still allocating discretionary spending to electronic devices," SIA president George Scalise said on a webcast to discuss the forecast.
The news hit the chip sector hard today. Shares of top microprocessor maker Intel fell 3.8%, and Advanced Micro Devices dropped 6.3%. Look for a moderate bounce-back once Wall Street has fully absorbed the news and priced the new estimates into to the chip sector.