"the $31 per share offer "massively undervalues" Yahoo,"
Now I'm no mathematician, but when microsoft made that offer, I believe their stock closed at 19.10, which I believe is significantly less than $31. The mere offer from microsoft caused their value to jump 50% in a day. Monday might be ugly for YHOO owners.
The reason being that a company that you control is worth a lot more than a bunch of shares that pay you dividend, but offer you little or no control over the company.
The pundits know this and drive up the price, expecting to make a profit when Microsoft buys them out.
I feel like the value of a company is mostly defined by Wall Street, at least for a company the size of Yahoo. Obviously there are companies that provide important services that aren't even public, however, when determining a company's overall value or growth, stock price is a pretty good indicator.
Now I'm no mathematician, but when microsoft made that offer, I believe their stock closed at 19.10, which I believe is significantly less than $31. The mere offer from microsoft caused their value to jump 50% in a day. Monday might be ugly for YHOO owners.