As you may know, Microsoft made an unsolicited bid of $45B for Yahoo! last week. The bid values the stock (YHOO) at $31 / share.

In a recent article on CNNMoney.com, we recently learned that Yahoo! is considering various strategic options in addition to Microsoft’s bid.  Jerry Yang, the CEO, wrote in an email to Yahoo employees,

“Microsoft’s proposal is one of many options that we’re evaluating in order to maximize value for our shareholders and employees over the long-term. That’s why we will respond to Microsoft after our board has completed a careful review of all of our strategic alternatives.”

If you read between the lines, it appears Yang would prefer not to sell the company to Microsoft.  However, given Microsoft’s attractive offer and the recent performance of YHOO, Yang will need to  convince shareholders his plan is better than a 62% premium over current valuation.   In my opinion, that is going to be a tough story to sell.   Yang is better off taking the money, selling out, and enjoying an early retirement.

What do you think?  Should Yahoo! sell out?

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