Icahn Stirs Muck for Yahoo on the Tails of the Microsoft Bid

Carl Icahn, an ambitious investor and significant stockholder of Yahoo shares, expects to win a vote by the board to remove current CEO, Jerry Yang from his title. Icahn is disappointed with Yahoo’s rejection of Microsoft’s takeover bid, and with just cause. The company’s shares continue to deteriorate, falling 32 from last year. Yahoo claims their stock was worth more than what Microsoft offered and allows them to refocus their efforts to core business. With another drop in value today, the bid, no longer on the table, becomes a more attractive offer to shareholders, and momentum is building.

Dow Chemical Increases Prices By Twenty Percent

Dow’s CEO, Andrew Liveris, blames the US Government’s long-standing policy of inaction towards the rising energy crisis for the company’s recent hike in prices on all products across the globe by up to 20%. Dow claims a 42 percent increase in cost of their energy and “feedstock” (the raw petroleum from crude oil) for the first quarter compared to a year ago. My concern : Dow’s extensive list of products and services is a far reaching bohemeth and this price increase will gouge into the pockets of other industries that are already hit hard by the increase in fuel prices.

AMD Goes Head To Head Against Intel

This time, though, AMD will let the battle be decided by the clout-swinging suits instead of the cutting-edge Samurai-style technology touting ninja-neers. AMD has filed suit against Intel in a statement of anti-trust, alleging that Intel intervened and was able to sway decisions against AMD’s favor in many attempted business and marketing negotiations. Analysts expected this kind of response over 6 months ago. If the result of the complaint is in AMD’s favor, will it be enough to dig them out of this hole? Likely. They expected some losses this year as it acquired ATI, and have a new product launch planned this summer. While the move didn’t mangle Intel in today’s market, it didn’t look good. Intel seems adamant that they will come out ahead in the long run. On the other hand, AMD has already produced their statement of how they will continue to be successful as the move to integrated CPU and GPU architecture over the next generations of product lines. It is yet to be seen, but I am not convinced the outcome of the suit will make significant changes for AMD or it’s stock. We will also have to pay attention to how it will affect the consumers to see how that will play out.

Warren Buffett Doles Out Advice

In a press conference on 5/4, Warren Buffett spoke these words of advice to would-be investors:

“You should be able to write down on a yellow sheet of paper, ‘I’m buying General Motors at $22, and GM has [566] million shares for a total market value of $13 billion, and GM is worth a lot more than $13 billion because _______________.” And if you can’t finish that sentence, then you don’t buy the stock. [he mentioned GM for example purposes only.] All this requires some temperamental detachment from other people’s behavior. Both Charlie and I have a natural instinct in that direction. We value our opinions more than others’ — perhaps to an extreme!”

Buffett goes on to explain his philosphy of buying stocks. He commends the stock shopper whom looks for the bargain, those stocks who are already low. The lower stock prices enable the shopper to purchase more of something, at a better price.

This might be really simple and basic common knowledge to many, but it’s the strategy that Berkshire Hathaway will continue to use for success according to Charles Munger.

 

Yahoo’s Buy-Out Offer Deadline Closes In

Today’s the final day for Yahoo to respond to Microsoft’s takeover offer from February 1st 2008. The truth is, they have already responded. Yahoo’s told them that at $31 a share, they’re undervaluing the company. Yahoo feels the massive organization is worth $40 a share. Microsoft has threatened that to not accept this offer may instead cause them to receive worse offers in the future. It’s possible that Yahoo’s stockholders may vote pro-Microsoft members onto the board at the next opportunity. I still say we haven’t seen the last of it yet. It seems as though it will be tough for Yahoo to avoid it in the long term.