I’ve decided to speculate that Yahoo and Microsoft are going to merge again.  Even if they don’t, I think short term price appreciation is to be had:

  1. New CEO looks pretty sharp.
  2. Price level is low low low.
  3. I think Microsoft will come back to the table for some reason or another

Even though a complete buyout has low odds, if Microsoft does come back, at a minimum there will be some kind of partnership.  This can only be good for YHOO stock as it tries to stay competetive in the online ad marketplace.  Pair that with the low stock price and my feeling is that ANY good sales and profit growth news will cause a decide ROI up tic in stock price.

I am in this for the short term– 6 months max.  I am out then, whether the stock is high or low (unless YHOO is in the midst of M&A talks).

I bought (for my simulated portfolio) YHOO today (2/24/2009) at $12.52/sh.