It Seems Microsoft May Blink on Yahoo Deal and Offer $35 a share

It seems that way to "a person familiar with the matter."

The New York Times, citing unnamed sources, reported Microsoft boosted the offer by "by several dollars" per share, lending weight to the assertion by many market analysts that Microsoft can afford to pay up to $35 a share.

Representatives from Microsoft and Yahoo declined to comment on the negotiations. The talks were expected to continue into the weekend.

I guess the good trade was to be long Yahoo and short Microsoft after all. I was thinking of going long Yahoo to catch this deal but I was too afraid of Microsoft walking away from the thing all together. If MSFT did walk away then you would see Yahoo's shares drop back down to the teens. Now it looks like a $31 to $35 or so a share sweetened deal may be on the table. If Yahoo walks away from this offer, however, then I would be betting that Microsoft scuttles the whole thing and their share price should head back north of $30 again.