Will Yahoo! Say ‘I Do’ to One of These Suitors?

Yahoo! Inc. (NASDAQ: YHOO ) is no stranger to being in the headlines,
particularly since September when talks of selling the troubled Internet company
started to heat up after the company let go of CEO Carol Bartz. Between
Blackstone (NYSE: BX ), Bain, Silver Lake, Alibaba, Softbank, Microsoft (NASDAQ:
MSFT ) and others, there seems to be a pretty good likelihood for a suitor to
emerge for Yahoo!. While share prices have rallied lately due to the chatter,
they are still trading well-below the $22 level where many anticipate the
bidding will begin. Technically, YHOO did hold the $14.80 level and seems poised
for an upside breakout above the recent highs at $16.70. Valuations remain
reasonable, so I like the risk/reward trade-off of 2 points of downside to the
$14.80 level versus 5 points of upside if a takeover play emerges. Remember,
trading is all about probabilities, not certainties (unless, of course, your
name is Raj Rajaratnam). That said, I think a deal may get done by June 2012,
with a target (takeout) price of $22. Based on YHOOs current market price of
$16.05 and using a target price of $22, a target date of June 1, 2012, and
$1,000 of investment capital,