Would the rumored joint bid by Microsoft and News Corp, if successful, result in this stock paying out at $100?

Yes—a joint bid by Microsoft and another party or parties would qualify.

I’m making the assumption that a hostile takeover does not qualify as a successful “buyout”?

I would think if MSFT ends up owning Yahoo, hostile takeover or friendly, they would have been successful in achieving their objective of buying Yahoo.

A hostile takeover will qualify ONLY if Microsoft (as a corporate entity) ends up owning more than 50% of Yahoo! stock at end-of-year.

It will not qualify if parties amenable to Microsoft (but not Microsoft itself) own more than 50% collectively, even if with their help Microsoft can appoint enough members to control the board of directors.

I’m watching this market pretty closely, so feel free to post questions or ask for clarifications. This could get thorny, but I will try to be as fair and impartial as possible.

…and then I watched the news. Market closed. :-)

My current hold position is 0 so the cash out doesn’t matter to me one way or the other. However, just because Microsoft has rescinded its offer doesn’t mean they won’t successfully buy out Yahoo in 2008.

May be negotiating tactics, waiting for shareholders to start screaming when Yahoo’s price plummets on Monday forcing Yahoo to come crawling back. Or MSFT may sweeten the offer later in the year. Or Yahoo has a bad quarter and stock craps out leading Yahoo shareholders to jump at a lower offer. Or nothing could happen.

One thing is certain, however, technically the answer to the question posed is still unknown and unknowable until the earlier of 1/1/09 or MSFT is successful.

Good points, wstritt and idealsam. I agree that I jumped the gun closing this market (a first timer’s mistake). Thanks for pointing it out.