$34 Bid Most Likely MSFT-Yahoo Outcome: Analyst

In the absence of any fresh news, it’s always fun to speculate. Shares of Yahoo (NSDQ: YHOO) are getting a boost today after Citi analyst Mark Mahaney said an increased $34 bid from Microsoft (NSDQ: MSFT) was the most likely outcome to this drama. The view isn’t based on any specific knowledge of the situation, nor is it valuation-based. As he explained in a CNBC interview, it’s just a risk-reward kind of play: Microsoft is committed to this deal, so $31 should be a magnet for the company’s share price. If Microsoft wants to get the deal done expeditiously, it will raise its bid by a few bucks, giving investors who buy in now more than a 20 percent pop. Yahoo shares are currently up about 2.5 percent on what is a down day overall for the markets. Some key points from his report:

Microsoft unlikely to walk: “Despite 3-4 years of making online advertising a key strategic priority, MSFT has yet to demonstrate traction

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