Commercial Real Estate Blog

If there was ever an example of why people should stick to what they know, it is in today’s news. T Boone Pickens, the wildly successful oil and commodities investor that runs BP Capital has reportedly dumped his stake in Yahoo! (YHOO: 19.42 -1.57%), at what can be speculated to be a significant loss.

After Carl Icahn showed up to the Yahoo-Microsoft party, T Boone Pickens decided to invest by picking up roughly 10M shares of Yahoo stock. That was in May, when the stock traded around $25. Frustrated with the way things were going, he has reportedly dumped his entire stake, for what would represent a $50M loss given where Yahoo! is trading today.

His track record as a oilman and trader has been stellar these past few years so if this didn’t teach him to stick to what he knows, I don’t know what will. At the very least, if you’re going to foray into some unknown territory, stick a toe in first (though to be fair — for Boone Pickens that might be a toe).

Yahoo has entered into a non-exclusive agreement with Google (NASDAQ:GOOG) to allow Google to run ads on Yahoo’s web properties. The deal is estimated to ad approximately $800M a year in cash flow to Yahoo. As of June 8th, Microsoft and Yahoo have concluded their negotiations as well.

Microsoft (NASDAQ:MSFT) has expressed interest in continuing negotiations for a portion of Yahoo, but supposedly is no longer interested in an outright takeover of all of Yahoo. Yahoo still is not out of the woods though, their will undoubtedly be some anti-trust scrutiny of the deal, as well as continued pressure from Carl Icahn, Boone Pickens, and other large shareholders as they likely still seek to oust Jerry Yang and supplant the board with their own, presumabely so they can push through a deal with Microsoft.

Yahoo’s shares (NASDAQ:YHOO) ended down the day 10% to $23.63, roughly 30-40% less than where a deal with Microsoft could have been struck a few months ago.

As for the real estate plans of both companies, Google recently signed a deal with NASA for a ground lease to build a campus, and Yahoo owns some 50 acres in Santa Clara that is available to it to construct a campus if need be. As of now, Yahoo is mainly spread out between its Sunnyvale and Santa Clara campuses, with much of the Santa Clara campuses and buildings owned by Sobrato.

The Yahoo-Microsoft fiasco continues. Attorneys for investors won the right yesterday in court to release meeting minutes and other details behind the so far non-acquisition of Yahoo! (NASDAQ: YHOO) by Microsoft (NASDAQ: MSFT). Not much of a commercial real estate angle here except to say that Yahoo owns a bunch of land in Santa Clara that was originally slated for development into a campus and that those plans are probably on the back burner while they defend themselves.

Apparently, from documents released yesterday, Microsoft offered $40 per share for Yahoo! back in January and management estimated that a Microsoft takeover could translate into a 15% or 30%  reduction in Yahoo workforce. Yahoo is now faced with a barrage of complaints from disgruntled investors, with big boys Carl Icahn, Daniel Loeb, and Boon Pickens in for a fight to oust the current board and replace them with a more Microsoft-Merger friendly group.

It will be intersting to see what happens.