Pride shimmers in a shot glass, but it goes down hard.
We may never know how sturdily the $6.75 exit strategy would have stuck, but we already know the price of Restoration Hardware's poor judgment. After a slight dip in holiday sales and further rumblings of the housing industry's downturn, the home decor retailer found Catterton slashing its buyout offer to $4.50 a share last month.
Sears probably chuckled, even if it meant a financial hit on the nearly 14% stake that it had accumulated in Restoration Hardware. The $6.75 offer was laughably off the table. Last night, Sears re-entered the picture by offering a more realistic $4.55 per share.
The dot-com heavy already turned down Microsoft's
A proxy battle may push out the $28.77 buyout offer for Yahoo! investors to decide on, but what if they, too, have been swigging the Proud Punch? What if conditions continue to deteriorate -- as we saw with Restoration Hardware this winter -- and even the original Mr. Softy parachute is no longer available?
Time is not on Yahoo!'s side. Valuations in the search engine space have fallen since Microsoft's original offer. Both Google
In other words, Yahoo! may have been overvalued even before Microsoft's bid, and that's accounting for the roughly $12 a share that Yahoo! has in cash and Asian investments. Why do I get the feeling that -- a year from now -- Yahoo! may join the list of companies like Restoration Hardware and Circuit City that lived to regret the moment that they let credible buyers walk away?
Yahoo! doesn't want to hear that. Pride isn't just a humbling drink. It comes with earplugs, too.
Microsoft and Sears have made the cut as Inside Value stock picks. If you want in on the next big undervalued company or turnaround situation, sign up now for a free 30-day trial.
Longtime Fool contributor Rick Munarriz thinks that pride shots wash down well with crow chasers. He does not own shares in any of the stocks in this story. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.