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Two Ways To Play: Yahoo's New Suitor

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Strengthen your portfolio in good times and bad.

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Yahoo's (YHOO) attracting a new bidder. And this time, instead of Microsoft (MSFT), it's former AOL chief Jonathon Miller. According to the Wall Street Journal, Miller has been talking to private equity investors and sovereign wealth funds about a potential takeover worth between $28 and $30 billion (which values Yahoo's stock at $20 to $22 per share).

It's unclear what stage talks are in, but with a potential deal comes many risks. And even with the deep pockets of sovereign wealth funds, raising that much capital will still be difficult given the state of the credit markets.

To top it off, the future of the company itself is yet unclear on account of a weak advertising market and ongoing search for a new CEO.

Shares of Yahoo gained 8% to close at $11.60 in today's session.

From the Bull Pen: While its never good to pay up on takeover talk, those bullish can consider Yahoo on a pullback toward $10.


From the Bear Cave
: Tech bears can look to Research In Motion (RIMM). Notice the triple bottom break at $40. Those playing the downside can use a tight stop above that level.

No positions in stocks mentioned.

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