NEEDHAM UPGRADES YAHOO TO BUY FROM HOLD
Needham analyst Mark May says that actions and statements by Carl Icahn, Yahoo (YHOO), Microsoft (MSFT) and others over past few days suggest significant, positive change is more likely at Yahoo.
May believes an acquisition of Yahoo by Microsoft is the most likely outcome, with an assumed 50% probability of an acquisition, at a price of $33, $35 or $37 a share. He thinks a search outsourcing arrangement is the second most likely scenario, with an assumed probability of 40% of either a partial or total outsourcing deal with no or some cost savings. He sees 10% probability that no deal occurs.
He has a 31 price target, based on outcome probability analysis.