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Doug Kass: This Giant Tech Takeover, A 2011 Surprise

Hope you like surprises because widely followed strategist Doug Kass of Seabreeze has a few more - and again they're doozies.

As you may know Kass will be revealing portions of his annual -- and much anticipated -- list of “Surprises for 2011” on Fast Money throughout the month of December.

We’ll be bringing you two a week through the end of the year. Scroll down for a complete list as well as links to past surprises revealed!

Now onto his latest surprises.

SURPRISE #5

This one involves a tempestuous, on-again / off-again relationship that ultimately ends with a pull-out-the-stops union. No, he’s not talking Prince William and Kate Middleton. But close.

The prince and princess in this story are technology royals; Bill Gates and Carol Bartz.

Uh huh - Kass thinks that Microsoft and Yahoo will finally tie the knot. ” In 2011 Microsoft launches a tender offer for Yahoo at $21.50/share,” he says.

But this story has a twist. Kass tells our producers that another suitor attempts to win the affections of the Internet search company.

That’s right; he says to keep your eyes open for a love triangle. (Sounds like a movie about Liz Taylor, Debbie Reynolds and Eddie Fisher, but we digress.)

Kass thinks that News Corp gets into the game and bids against Microsoft. According to Kass, Gates wins out but it doesn’t come cheap.

When all is said and done Kass thinks Microsoft will pay $24/share for Yahoo! in 2011. With Yahoo around $16 at the time of writing; that's a pretty hefty premium.

”Very few people expect this to occur,” he concedes during a live interview on Fast Money, “but a deal could be advantageous for Microsoft. It would give them critical mass on the Internet. And it would immediately give them exposure to a very rapidly growing Chinese market.”

Kass isn't just talking the talk; he's walking the walk. Following are his relevant disclosures:
Seabreeze Partners Management Owns (MSFT), (MSFT) Calls
Seabreeze Partners Management Owns (YHOO), (YHOO) Calls

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SURPRISE #6

Again, Kass is predicting a drama – and if you’re holding a hot beverage you might want to set it aside – because this prediction is a little hard to swallow.

He says to expect Joe Biden and Hillary Clinton to switch jobs by mid-year 2011.

You read that right. Joe Biden will become Secretary of State and Hillary Clinton the nation's VP before the 2012 election.

“The reason I’m saying this will occur is because I think the administration will have to consider a radical and unconventional change in order to survive,” he explains during a live interview.

Kass largely believes that high employment and a weak housing market continue to challenge the economy. “So they’re going to have to think outside the box.”

”(And) Hillary Clinton harbors dreams of the White House; this move would make her the overwhelming favorite to win the Democratic nomination in 2016,” says Kass.



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Douglas Kass
Douglas Kass

As we mentioned above Doug Kass will reveal more of his 'Surprises for 2011' on CNBC’s Fast Money over the next few weeks with appearances scheduled for the following dates:

Monday, Dec. 13
Monday, Dec. 20
Monday, Dec. 27

Click below for past surprises that Kass already revealed on Fast Money

> Doug Kass: Shortage of 'This' Could Roil 2011 Markets

> Doug Kass: Jaw Dropping Prediction For 2011

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* We realize the predictions above are a tad dramatic. In all fairness Kass divides his predictions into 2 categories possible and probable. And he didn't say if these surprises are more possible thanprobable.

However, when Kass speaks we listen - largely because he’s had an uncanny track record for being right.

Less than a week before the S&P 500 hit a generational low of 676 on March 9, 2009, Kass went on CNBC and predicted the bottom. Also, on July 6, 2010, he said the market had made its lows for the year and so far, that has also proved to be true.




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Trader disclosure: On December 6, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour Owns (AAPL), (BX), (CSCO); Terranova Owns (OIH), (UPL), (C), (PEP), (VRTS), (AAPL), (GS), (OXY), (NKE), (CMA), (PFE); Terranova Owns (FCX), (FCX) Puts; Adami Owns (AGU), (C), (GS), (INTC), (BTU), (NUE), (MSFT)

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For Doug Kass
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Seabreeze Partners Management Owns (YHOO), (YHOO) Calls
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