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Yahoos Largest Stockholder Buys More

By: Jordan McCollum
2008-04-11

Yahoos second largest stockholder sent a thinly veiled message to Yahoo this week, telling them that Yahoos better off independent if Microsoft...

...lowers its offer. But what does their largest stockholder think?

If were judging based on that, signs are looking good for the still-twisting-in-the-wind Yahoo: Capital World Investors nearly doubled its holdings in the company in Q1.

paidContent and CNET have all the boring facts: as of March 31, CWI owned 135.5M shares of Yahoo, or 10.1% of the company. Thats up 95% from their Q4 2007 stake.

But Im here to give you nice, juicy speculation (as long as I dont pretend its a fact, right?). Join me, wont you? Possible scenarios (with illustrative stock chart for your reference):

Yahoo stock chart year to date

• CWI increased their stake right before Microsofts bid, when Yahoos stock was at the lowest point YTD (Jan 30-31), because they saw Yahoo as undervalued.
• CWI bought up new shares between the offer and the rejection (Feb 1-9), when stock prices skyrocketed. (And they continue to hold them because they have . . . sentimental value. Yeah.)
• CWI is holding nearly twice as much stock because they think that Yahoo should take the offer and want to have a controlling interest in the event of a hostile take over.
• CWI is holding nearly twice as much stock because they want Yahoo to remain independent and are trying to help them out with cash.
• Or is this just a move by Staceys sugar daddy, Carter Waltham III, to keep controlling her (and if it comes to a hostile takeover, he just wants to have the final say)?

Obviously, no matter what their timing and motivations, CWI rated Yahoo a buy last quarter. What do you think the most likely scenario is?

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About the Author:
Jordan McCollum is a staff writer for the popular marketing blog Marketing Pilgrim. She has worked in search engine optimization with clients including 3M, Little Giant Ladders and ADP. After graduating from Brigham Young University, Jordan joined the SEO copywriting team at the Internet marketing firm 10x Marketing. After 10x closed its doors in December 2006, Jordan became a freelance writer and Internet marketing consultant specializing in SEO. She also has extensive experience with web analytics, conversion rate enhancement and e-mail marketing.


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