Monday, February 11, 2008

Recommending a RARE Trade

I'm not usually a fan of recommending a stock on a short term basis. However, I've found a situation where I think we can make at least 10% over the next few weeks. As some of you may know, Microsoft (MSFT) offered to buy Yahoo (YHOO) on February 1st for $31 per share. Today, Yahoo rejected that offer and released a statement saying the offer, even though it represented a 61% premium to the closing price on January 31st, substantially undervalued Yahoo. I think this is just posturing on the part of Yahoo and I believe this deal will get done at a slightly higher price. I'm putting in a limit order for Tuesday, February 12th to buy Yahoo at or below $30 per share with the idea that I'll put in a limit order to sell at or above $33 per share should the buy order get filled. I'll keep you updated on this trade.

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