Yahoo Stock Drops on Reports of Low Bids
While some figured that Yahoo could get as much as $10 billion for its core business, bids from about a dozen suitors are as little as $2 billion.
It was a good day for tech stocks Friday, with the Nasdaq up 57 points, but Yahoo didn't participate in the rally, after reports surfaced that bids for all or parts of the pioneering Internet company came in lower than expected.
Shares of Yahoo dropped more than 1 percent, leaving the new-media company with a market cap of $34.6 billion.
While some figured that Yahoo could get as much as $10 billion for its core business — which excludes its stake in Alibaba and Yahoo Japan — bids from about a dozen suitors are as little as $2 billion and none are approaching even $8 billion, according to observers.
Among those presumed to have made a bid are Verizon, which bought AOL last year for $4.4 billion, and some private-equity firms. There's also speculation that Warren Buffett's Berkshire Hathaway made an offer, perhaps in conjunction with Dan Gilbert, the founder of Quicken Loans and owner of the Cleveland Cavaliers NBA team.
Yahoo still could choose to sell itself off piece-by-piece if it deems the offers too low, or it could end the bidding process entirely, a decision that would likely cause the stock to drop about 24 percent, back to where it was in February, when rumors first surfaced that CEO Marissa Mayer was seeking strategic alternatives for Yahoo.