After Microsoft pulled its offer to buy Yahoo for at least $33 a share, Yahoo’s stock has fallen this morning from Friday’s $28.67 close to around $24.50 a share. That’s a pretty steep 14% drop.
But it’s not as much some people expected. Deutsche Bank, for example, just set a target price of $17, and other analysts had expected shares to fall closer to the $19 and change where they stood just before Microsoft’s unsolicited bid.
Investors may be buoying Yahoo’s stock partly because they are looking forward to a possible search ad outsourcing deal with Google. They’re also probably figuring in a small premium on the chance that Microsoft at some point may come back with another offer.
So to answer the question in my headline: Not yet. Unless big shareholders such as Legg Mason and Capital Group’s Capital Research Global Investors and Capital World Investors burn up the phone lines to Yahoo CEO Jerry Yang today, he may very well feel he has a little room to prove himself.
Whether that attitude is justifiable or not is another question—a lot of shareholders lawsuits probably being filed right now will make a case for the contrary—but it’s clear from events of the last few days that Yang will not easily relinquish the company he cofounded.
Still, the next few days will be crucial. If a Google deal (quite possible) or an AOL deal (don’t hold your breath) doesn’t come through, and if Microsoft is successful in continuing to drive the point home that “no” means no, Yang’s runway will start to look pretty short pretty quick.