Yahoo shares plummet nearly 21 percent on Ballmer comments

Updated 1:30 p.m. PST, with Yahoo's closing price and additional information on Microsoft-Yahoo-Yang.

Yahoo shares went into a free fall Wednesday, plummeting 20.9 percent following comments from Microsoft CEO Steve Ballmer that the software giant is interested in a search-only partnership and not a buyout of the entire company.

The Internet search pioneer fell $2.41 a share to close at $9.14 a share, during the regular trading session. And at one point in the trading day, Yahoo's shares dipped as low as $9.07 a share.

(Credit: Yahoo Finance)

The stock went into shock after Ballmer reiterated that Microsoft has no plans to acquire Yahoo and that its interests mainly lie in a potential to do a search-only partnership with the company.

Ballmer's comments were made during a question and answer session at Microsoft's annual shareholders meeting.

That disappointed Yahoo investors, who were holding out hope that Microsoft would come back to the negotiating table after the Internet search pioneer announced Monday that CEO Jerry Yang would step down as soon as a replacement was found. Many investors had blamed Yang for the failed Microsoft buyout talks, when the software giant walked away from its previous offer of $33 a share to acquire the company.

Yahoo's stock has undergone two rounds of whiplash this week, soaring as much as 16 percent in intraday trading on Tuesday after the Yang announcement.

Over the past 10 months, Yahoo's stock has repeatedly been whipsawed whenever Ballmer or Yang have made a reference to a deal or no deal.

Earlier in the week, after Yahoo had announced Yang would be stepping down, one influential Microsoft source had told CNET News that Yahoo investors who were still "lusting" after a Microsoft buyout would be disappointed.

The source had noted that the topic of a Yahoo buyout has not come up in Redmond for months and months now and that the two companies are not talking.

And another source quoted in the story, who is familiar with Yahoo's thinking, noted it was unlikely the Internet search pioneer would consider any search-only related deals until Yahoo had a new CEO in place, allowing that person to weigh in on the topic. Yahoo is expected to make a decision on its next CEO within the next six months.

[Arbalest05]

The article didn't mention that Microsoft's stock also fell by 4% on the same news.

[mbenedict]

Well, at this moment NASDAQ is roughly down by 4% (MSFT, GOOG, RIM, are all about -4%) but Yahoo is -19.31%. So that 4% decline means MSFT is par with the techs.

[ghostofitpast]

So if Ballmer DID want to take over Yahoo!, his first step would be to drive down the price!

[JCPayne]

Yahoo looking for a new head would also drive prices down until a new head is actually named and investors get the chance to decide on what that new person stands for...

[Renegade Knight]

At least MS is admitting what they really wanted out of Yahoo. They are also pointing out why Yahoo is better off finding its own lets.

[Penguinisto]

Pretty much all stocks are in a nosedive ATM... some worse than others. YHOO is currently only 14% down from opening (instead of 20%), so I'd wait for day's end before pronouncing good/bad on whether or not Ballmer's mouth caused a nosedive.

[Vegaman_Dan]

Final tally was down by 21% to $9.14. This clearly indicates that their drop in price is well beyond any drop in the overall market.

[Penguinisto]

Indeed. But then, there was also a lot of uncertainty around Yang's departure and etc.

[JCPayne]

I totally agree here with Penguinisto... Investors may also have dropped some Yahoo shares because they don't know who the new leader will be.

[tipoo_]

DEVELOPERS DEVELOPERS DEVELOPERS!!!

[bubuschoeny]

Nah MSFT will wait for Yahoo's stock to drop to nothing then buy what it wants in the fire sale. I wonder if "Chief Yahoo" means "Village Idiot" . LOL

[assman]

I thought Microsoft was run by idiots (Ballmer), but Yahoo is in a whole nother category of stupid. Can't believe it took them this long to get rid of Yang. Probably the worst tech stock in existence in terms of the idiocy of the entire operation.

[Zandora777]

Web portal companies with egos are so 1999.

[Mr. Dee]

You go Mr. Ballmer, let it hit rock bottom then pick it up on sale for Wall-mart prices.

[slecalvez]

I'm sooooo glad this happened. Eat your pride Yang.

[JCPayne]

CNET must have a crystal ball.... Because I know most people can't tell why Yahoo's shares fell exactly...How does CNET know that the reason why Yahoo's shares fell was because of Ballmer? as opposed to--say the news that Jerry Yang will be stepping down meaning investors could also be somewhat nervous until a new head is named and they have an idea of what that new head with stand for?

Anyway Yahoo there's always an Ebay merger... PayPal would be a great Yahoo asset as would Skype merged with Yahoo IMer.

[i_made_this]

*Search* in the sense we know it is soooo 1999. The sense we know of it consists of bothersome repeat hit hierarcies (with migraine-inducing ad's to boot). The market is far more mature now. We demand info-based *Search* hierarchies which erase tracks, to boot.

Even those geniuses @ GOOG haven't figured that one out yet. How much do YOU hate Google for blabbing to the world who you had sex with on Jan 7th 1997 at 3:04AM PST, climaxing precisely at 3:31AM PST?

No one digs TMI. What algorithm can provide just the right tonnage of info about the precise square foot in your home you stood on five minutes ago? Nowwww we're getting 2009.

By 2019 GOOG will figure out that no one wants to eknow about such garbage clol (except divorce attornies and ambulance chasers .. both of whom who ADORE Search!).::P

[jasleinstein]

Say good or bad things about Ballmar and MSFT. But Yang holding on to his ego and his money while Yahoo employees and stock holders suffer is criminal. Its time CEOs take responsibilities for their actions. Yang should give back his profits from the company to help those about to be let go.

[fdunn3]

Wait until the Stock Market hears that the Top Search Executive has resigned and is possibly going to wind up at MSFT. I predict a mass exodus of the search team right into MSFT's employ.

Congratulations Jerry you took dow Yahoo al by yourself.

[Ballmerrocks]

You people who are smart, cultured, savy, suave and tasteful enough to read this blog are privilaged to get the actual story, not that crapola we feed to the talking heads, info-babes, self-obsessed pundits and PR leeches out there!
Right now the Yahoo stuff is still hot in news circulation. Let me clue you into what's really going on:
1.) I will acquire Yahoo!
... All of my recent statements, denials, insults and dismissals of Yahoo is but part of our larger strategy of getting the price right! When Yahoo stock is down to about $6, we will pounce (I love that word) on it! I will keep talking my head off, denying and railing about it until the price is right!
2.) I will have my revenge on Yang and his henchmen!
.... They had a good time double-crossing and making me look like a dancing monkey-boy fool, they shall pay!
3.) Ichan is my unwitting puppet!
... Carl is a snake in the grass! (-gr) He claimed that he played me like a fiddle, he will find out that the tune was Taps!
4.) Google is doomed!
.... My Yahoo/Cloud/Azure/Zune/Silverlight strategy will conquer and crush all competition within the next 5 years!

Right now, I'm playing the fool!

I am not evil

http://fakesteveballmer.blogspot.com