Let's suppose Yahoo holds its board meeting today, as TechCrunch is reporting – we wouldn't expect a definitive response to Microsoft's hostile $44.6 billion bid immediately, especially not on a Friday afternoon. Yahoo's standard party line is that its going to take its sweet time considering the offer. And considering it's only been one week since Microsoft submitted its bid, that hasn't given Yahoo a whole lot of time to scare up an alternative offer.

But while Yahoo takes a leisurely approach to the deal – rumors are circulating that the company is still holding out for a higher offer – investors want the deal done already. Yahoo shareholders don't care if Steve Ballmer is the emperor of evil, nor do they care about the implications of the merger to Flickr. The thing that matters most to shareholders is Yahoo's stock price, and that looked awfully ugly before Microsoft came in with its $31 per share offer.

"This is totally insane," says Shareholder Value Management analyst Jeff Embersits. "There's no way Yahoo's worth $44 billion. Period. [Yahoo Management] should fall on their knees, kiss the ground and go home and buy Porsches."

Although technology industry shareholders tend to be a pretty litigious bunch – Yahoo is currently facing several securities lawsuits, according to its most recently quarterly report – if the company were to reject the Microsoft offer and pursue a deal with Google, it could pretty much expect an onslaught of shareholder suits.

"Every board member should expect to get sued every single day of his life if [Yahoo doesn't] take the Microsoft offer," says Laura Martin, an analyst with Soleil - Media Metrics. "If they do a deal with Google, all they're trying to do is save their jobs."

While we don't doubt shareholders would jump on a lawsuit in a heartbeat, the legal grounds of a claim could be shaky, according to experts.

"I don't think there's a case," says Richard Sacks a securities arbitration expert with Investors Recovery Service. "In order for there to be a case, you have to have damages. And right now Yahoo shareholders have the opposite of damages. They have profits. If the stock goes down because the Yahoo board rejects the offer, and you held on to Yahoo shares, where are the damages? You made the decision to hold on to the stock."

That may not stop shareholders from suing, though. Given the pace of mergers and acquisitions in the technology industry, most major players have been subject to all sorts of securities lawsuits.

"For a company like Yahoo - given its size and industry – this wouldn't be uncommon," says Kevin LaCroix, an attorney outside Cleveland, Ohio. "Certainly all the big Silicon Valley companies – Sun, Apple, Oracle – they've all had lots of securities litigation over the years. It's somewhat characteristic of the industry."

Photo: Flickr/creepysleepy

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