Yahoo! Pops On Takeover Rumour

Shares of Yahoo! got a boost Wednesday on rumor that America Online and a group of private equity partners are looking to buy the Internet giant.

It was just a short time ago back in February 2008 when Microsoft made a $44.5 billion offer ($31/share) for the company. At the time, Yahoo was trading $19/share and was no where near its all time highs.

As Yahoo execs mulled over the offer and refused to be taken over, they saw their shares fall to $9. For the better part of 2009, the stock has traded sideways at $15/share.

Today the company stock traded up nearly 6% on above average daily volume of 51 million shares. After hours 2.2 million shares traded hands up $2/share after the news was released.

Institutional holdings amount to roughly 40% of common and nearly 20% from mutual funds. Given that Yahoo has such a large float of 1.2 billion shares I don't see the stock trading euphorically like it did in Dot Com Bubble Days. Typically large float stocks move up on a series of gap ups to build their buying momentum.

Time Warner, the parent of AOL traded light volume for the day and closed up $0.42 at $31.49.

About Kerry Kobashi

Kerry is the founder of KerryOnWorld. He lives in Silicon Valley and has worked as an engineer and project manager. He owns Kobashi Computing a consulting company.