Microsoft just recently came public with their announcement to withdraw their offer to acquire Yahoo! in what would have been a blockbuster deal. Apparently, after months of negotiations, Yahoo!'s CEO and board of directors felt like the offer was inferior to what the company is worth. On a personal note, I highly disagree.

Here is the legal problem: When the opening bell rings on Wall Street Monday morning, Yahoo!'s stock will likely drop by $5-8/share, as it was priced at $19.31/share at the close of the markets on Jan. 31, 2008, before the Microsoft offer was announced. The next day the shares closed at $28.38/share on hopes that Yahoo! would accept Mr. Softie's gigantic buyout offer. See the problem?

Lawsuits will be filed in courts all across the nation in the coming weeks, alleging anything and everything from breach of fiduciary duty by the officers of Yahoo! to pure negligence. The main issue in these cases will be whether or not Yahoo! acted in the best interests of the shareholders by refusing to accept Microsoft's offer.

Stay tuned, it should be an interesting few weeks in this regard.

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