Following on from yesterdays thread on Ronald Wayne who left $58 billion on the table when he bailed on the embryonic Apple I thought it would be good to look at a case where it would have been wise to take the money.
In 2008 Microsoft offered $44 billion for Yahoo – this valued the stock at $31 per share and was a 61% premium to the current price. Yahoo cracked the sad’s and rejected the offer saying it significantly undervalued the company.
The tale of the tape is that Microsoft were probably being generous because for the past 4 years Yahoos stock price has hovered around the $15 mark. For comparison sake I have dropped Googles share price over the top.
Interestingly Google saved itself from major embarrassment when Groupon piked at their $5.3 billion offer. Groupon then went public and is trading at a 30% discount to its offer price.
The folks at Groupon should probably have also taken the money.