Yahoo And Microsoft Stocks Jump; Internet ETFs Sit Tight
February 5th at 1:00pm by Tom Lydon
Friday’s news of Microsoft’s (MSFT) $44.6 billion bid for Yahoo (YHOO) has driven up share prices could affect related internet exchange traded funds (ETFs) heavily weighted in the companies.
Yahoo’s prices went up to $28.68 per share, a 52% jump from $18.87 per share on Thursday’s close. Hannah Glover for Ignites says that Monday represented another 3.35% increase to $29.33 per share. If the deal were to close as proposed, Microsoft would buy Yahoo for cash and stock at $31 per share.
Insiders feel that Yahoo will have a hard time turning down this offer, as mediocre earnings reports from the company came out and it never fully recovered from the dot-com crash. If they team up, Yahoo and Microsoft want to give Google (GOOG) a run for the search engine and online advertising market share.
Related ETFs:
- Internet HOLDRs (HHH): Yahoo is 20.4% of the fund.
- First Trust Dow Jones Index (FDN): Yahoo is 9.9%; Google is 10%.
- Technology Select Sector SPDR (XLK): Microsoft is 10.8%; Google is 6.1% and Yahoo is 1.2%.
- iShares Dow Jones US Technology (IYW): Microsoft is 13%; Google is 7.1% and Yahoo is 1.3%.
So far, only HHH is up since the Feb. 1 announcement, by 0.4%. The other three funds are down slightly. Keep an eye on them as this news progresses.
