Good Friday,
After combing through Google's terrific earnings, we see Microsoft (MSFT) buying Yahoo (YHOO) in a more friendly/easier buyout now that CEO Chang has stepped aside.
POTC predicts MSFT will bid approximately $22B - $23B, so around $16/share.
We recommend either going long YHOO shares from $10 - $12 with sell stops at $8 - $9 (depending on where you buy in), and or buying the March $13 Call options at $.90/contract.
Although we are pessimistic in our sentiment on the overall market, especially until we get some clarification on how harsh the regulations from the Obama team will be; we continue to find values in a scattered number of individual situations which are not directly correlated to the dreaded financial sector.
A great weekend is wished to all, from the entire Psychology of the Call team.
2 comments:
I think you meant CEO Yang.
I like the idea but yhoo reports on the 27th. Do you think the quarter is going to be good? Should we wait until after the report to catch the drop?
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