Thursday, October 14, 2010

Yahoo deal being orchestrated?

Yahoo shares are higher today after some fluff was bandied around about AOL and private equity firms buying out Yahoo. Whenever I hear rumors like this during the week of options expiry, I wonder who's benefiting from the juice that Yahoo shares are enjoying this week. Is it a PE firm who bought calls on Tuesday? Is it a touter who's trying to get out of a losing position in YHOO with as little pain as possible? WHO?

My guess would be multiple culprits who have a vested interest in seeing YHOO shares going higher this week. Once the juice is off, the shares will settle down again near 52-week lows. That's the way Wall Street works folks. Selling into rumor-driven strength (and buying on rumor-induced weakness) are old tricks that have been used since the days when Larry Livermore was making his bones as the Boy Plunger.

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