Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO), Motorola (MOT), Blockbuster Inc ‘A’ (BBI)

It would appear that Carl Icahn’s attempt to take over Yahoo! (NASDAQ: YHOO) has a few less fans. Short sellers increased their interest in the company by 19.4 million shares to 66.6 million between May 15 and May 30.

The gamble is almost certainly based on the emerging sentiment that Icahn has made an awful decision. He’ll either lose his proxy fight to take control of the company, or win it and find that Microsoft (NASDAQ: MSFT) no longer wants to purchase the company. Traders in general seem to care about that theory. Yahoo! shares have moved from just shy of $27 five days ago to as low as $26.26 yesterday.

Icahn’s biggest weakness may be that he has to be right. It has cost him a bundle in Motorola (NYSE: MOT) and Blockbuster (NYSE: BBI). Now, there’s no indication that Microsoft will pay any premium at all for Yahoo!. Redmond might have no interest in any deal any more.

Some group of traders is guessing Yahoo! will trade much lower.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

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This entry was posted on Wednesday, June 11th, 2008 at 12:03 pm and is filed under Latest News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.