Yahoo Trading Halted Pending Announcement
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"We called Yahoo after we pulled the plug on the company's trading at 9:37 Eastern time," says Nasdaq spokesperson Andy MacMillan. "We had to protect the market and there were just too many rumors being spread about the stock on the trading floor."
Yahoo pulled out from a Merrill Lynch Internet conference this week sparking immediate speculation about Yahoo's future.
The only other reason Nasdaq would halt trading is if the company reported it would have a major announcement during the trading session. MacMillan remarked that the company's stock would only resume trading after Yahoo makes an announcement. MacMillan could not say if the company was expecting to make an announcement today or not.
Yahoo confirmed they are holding a conference call after trading today, but could not say what the news was or even that Nasdaq contacted them this morning.
The news has market watchers speculating what the news could be. Rumors of mergers and acquisitions surrounding Yahoo have been running rampant in the press for a few months. Shares of Yahoo have dropped to $20.96, or 7 percent from Tuesday's price, before the Nasdaq pulled the plug on trading.
Safa Rashtchy, an analyst with U.S. Bancorp Piper Jaffray says the news probably isn't good.
"When a company makes a major announcement like this it usually signals some type of either huge management change or major layoff within the company," says Rashtchy. "They cancelled a meeting with me and several other analysts, which could also mean they are making a preannouncement about their earnings, but I doubt they would make a major announcement for something like that."
If the news is about a merger or acquisition, Rashtchy says it is likely to come from French entertainment company Vivendi not Disney despite statements last month from Disney head Michael Eisner that Yahoo would be a good addition to his company.
So is a Vivendi-Yahoo deal likely? Yes, says Rashtchy. Vivendi has reportedly been raising cash lately. Earlier this week, the Wall Street Journal reported Vivendi plans to sell its AOL stake for roughly $700 million.
Earlier today, Yahoo announced a content deal with Headhunter.net.
Check back with us later today, as SiliconValley.internet.com will have a full report on Yahoo's announcement.