GO
Loading...

How Pros Are Trading Buzz About a Microsoft Bid for Yahoo

Microsoft is considering a bid for Yahoo!, according to published reports Wednesday.

Sources tell Reuters that Microsoft may seek a partner to go after the struggling Internet company . But Kara Swisher, co-executive editor of the All Things Digital web site, said her sources say it's not going to happen. Then again, Microsoft had unsuccessfully tried to take over Yahoo! in 2008.

If Microsoft is going after Yahoo! yet again, it joins a host of other companies looking at the Internet player, including buyout shops Providence Equity Partners, Hellman & Friedman and Silver Lake Partners, as well as Chinese e-commerce giant Alibaba and Russian technology investment firm DST Global. So Joe Terranova of Virtus Investment Partners thinks it will be a "race to the finish."

Trader Stephen L. Weiss doesn't understand why Microsoft would want Yahoo!. The Short Hills Capital founder noted it already made a major acquisition earlier this year with the purchase of Skype. In addition, Microsoft already has its own search business, so he's not sure what Yahoo! brings to the table.

So what's the trade?

Terranova blessed Yahoo! as a trade. In the long-term, however, he recommends investors be nimble because "when the rug gets pulled out from underneath, it's not going to look good."

As a Microsoft shareholder, trader Karen Finerman would rather Microsoft not buy Yahoo!. Nonetheless, she is bullish on Yahoo!, but would also sell some out-of-the-money calls against it.

"Yahoo! is a screaming buy," said Guy Adami, managing partner at Drakon Capital, adding that it's continued to have good price action despite a lousy market. "Get on the Yahoo! train."

______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.

CNBC.com with wires.

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report

  • Bill Nygren, Oakmark Fund, explains why Apache, Bank of America and Google will be winners in 2015.

  • Nick Tiller, Sustainable America founder and chairman, tells CNBC's Kate Kelly oil prices are poised for a tradable rally. Tiller likes the Brent ETF and energy sector.

  • Discussing interesting trends contributing to the market's rally into year's end, with the FMHR trader Josh Brown and Dan Greenhaus, BTIG.