Investment manager Joe Rosenberg takes a swipe at Microsoft's bid for Yahoo in this week's Barron's, disparaging both the deal and CEO Steve Ballmer's financial acumen, Reuters reports. "It's a bad reflection on Ballmer that he's willing to pay a ridiculous price for Yahoo,” says Rosenberg. “Microsoft is not going to earn anything like a reasonable rate of return in Yahoo." An increased bid, which Yahoo is seeking, would be even worse, he says.
The market seems to agree: Microsoft's stock dropped four points since its bid, closing at $28.42 Friday. That value destruction nearly equals Microsoft’s offer for Yahoo, Rosenberg notes, warning that Ballmer should be nurturing his stock’s value to avoid losing employees tired of underperforming shares. "The best thing of all would be if Microsoft drops the bid," he adds.