What makes Microsoft think US$31/share is a reasonable price to acquire Yahoo?

US$31 was 64% premium above Yahoo's share price at that time...and after Microsoft made the offer, its own share price dropped...it represents Microsoft over-estimates the price and made a wrong decision on acquire Yahoo...





So...what makes Microsoft think US$31/share is a reasonable price to acqurie Yahoo?





And WHY Yahoo rejected Microsoft's offer? What makes Yahoo think the price is too low?





Please answer with analysis, evidence and proof. Thank you!!

What makes Microsoft think US$31/share is a reasonable price to acquire Yahoo?
The reason MSFT price fell is because after a buyout to another company, it is common for traders to buy the company being acquired and sell the acquirer.





It's considered a best-case scenario trade.





It's not easy to take over a big company like Yahoo. Their board knows this and is holding out for more money. MSFT needs growth and Yahoo represents that chance.





They will continue to dance into the summer, with the most likely scenario being MSFT will up their offer another buck or two and Yahoo having no choice but to accept it.
Reply:Maybe they feel there is enough damn Microsoft in everything already. I appauld the decision. Wall Street and the TLC has screwed up enough already. Money and dominance ain't the only games in town. A few seasons from now and Microsoft may be the forgotten child, yesteryear's diva, a Studebaker.