Yahoo spurns Microsoft

I pretty much figured that this would happen so that Yahoo can drive up their asking price.

As expected, Yahoo's board unanimously decided to spurn Microsoft after
concluding the offer -- originally worth $44.6 billion or $31 per share --
"substantially undervalues" one of the Internet's prized franchises. The
cash-and stock deal is now valued at about $40 billion, or $28.91 per share,
because of a drop in Microsoft's market value.

The fear now is if MSFT decides to walk away without a proxy fight. I think Yahoo's shares would tank and MSFT will probably go back to pre-merger prices. Could be an interesing trade there depending on how you think things will go.