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Overhype

by Joseph Weisenthal

Mon, May 7th 2007 2:35pm





Everyone Is Buying Everyone As M&A Speculation Reaches Fever Pitch

from the buy-sell-buy-sell dept

Last Friday, word of Microsoft and Yahoo possibly tying the knot gave everyone whiplash, as early rumors of a pending deal were quashed just a few hours later. Now, speculation about similar deals is building into a roar, as analysts toss about any and all possible merger combinations. Names that are being thrown about as possible Yahoo suitors include AT&T, Comcast, eBay, and (of course) Google. There doesn't seem to be much justification for any of these deals, but that doesn't seem to be the point. Wall Street wants to see deals, and individual analysts can raise their profile by making outlandish suggestions. The idea that Google might buy Yahoo seems the most absurd, since there's no reason for Google to buy the traffic that it's already taking for free on a monthly basis. But of course, these days no discussion of M&A is complete without mentioning Google, so the fact that someone would say it was inevitable. Another interesting angle on all of the buyout rumors is that some people are making serious money (via Om) on these short-term stock spasms, and it's not unreasonable to wonder whether the sources of these rumors have some ulterior motive. A very similar thing happened in March with Palm, as someone aggressively put out the word that the company would soon be bought out, sending the company's shares considerably higher. That too later proved to be false. Obviously, the media should be able to pass along rumors without being 100% sure of their veracity, but it would behoove news outlets to make sure that they're not simply getting played by interested parties.

5 Comments | Leave a Comment

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  1.  
    identicon
    KR, May 7th, 2007 @ 6:01pm

    blog arms race

    the media landscape is changing due to the strength and speed of blogs. in the race to scoop, unconfirmed rumors will be leaked via blogs. techcrunch got a nice deal of street cred when they scooped the youtube buyout. other bloggers seeing this halo effect are looking to have their own youtube scoop moment. the funny thing is that the yahoo merger rumor was fueled by the NY post, rather than the blogsphere.

     

    [ reply to this | link to this | view in thread ]

  2.  
    identicon
    RandomThoughts, May 7th, 2007 @ 6:47pm

    What, no one saw the interview Jim Cramer gave on YouTube about how hedge funds game the market?

     

    [ reply to this | link to this | view in thread ]

  3.  
    identicon
    Jason Jenkins, May 8th, 2007 @ 2:43am

    .com's buying .com's

    The great thing about todays tech M & A environment versus the late 1990's, is that larger internet companies are now in a financial position to acquire smaller .com's. I run a series of websites, abstract10.com, videostomp.com, contactlive.mobi, and videogavel. I have planned for years now to position these companies to simply be acquired by other .com's the we compliment versus an old media company like Viacom or Paramount.

     

    [ reply to this | link to this | view in thread ]

  4.  
    identicon
    Thomas, May 8th, 2007 @ 6:49am

    The problem...

    Is that the media is not able to verify M&A rumors before they either A. happen, or B. someone else reports the rumor. This is the same stuff that went down in Bubble1.0.

     

    [ reply to this | link to this | view in thread ]

  5.  
    identicon
    M&A, Oct 7th, 2007 @ 11:50am

    M&A

    M&A is seen,

     

    [ reply to this | link to this | view in thread ]


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