Update at 10:40 a.m. PDT, with analyst report on potential break-up of Yahoo and updated stock performance
Yahoo shares shot up 6 percent in morning trading Wednesday, on word that.
The stock price jumped 6.3 percent to $21.48 a share early Wednesday, just a day after Yahoo'sto come very near the level where they were trading prior to the start of Microsoft's buyout bid in February.
According to a report in The Wall Street Journal, Microsoft has been sidling up to other companies about teaming up to make a bid for Yahoo, a move that would result in a breakup of the Internet search pioneer, with Microsoft retaining the search portion of Yahoo's business.
Microsoft reportedly is talking to Time Warner and News Corp. about this arrangement, giving investors a sense of deja vu.Yahoo had reportedly sought out after Microsoft announced its unsolicited bid.
Investors may want to keep in mind this one sentence in the Wall Street Journal report:
Some of the people familiar with these talks say they are preliminary and unlikely to result in a deal with Yahoo.
Meanwhile, analysts Clay and Fred Moran of the Stanford Group note in a research report Wednesday that breaking Yahoo's business is unlikely to "drive value" for Yahoo shareholders.
A potential break up of Yahoo's business would likely result in Microsoft acquiring Yahoo's search engine, while a large media company could merge its Internet properties with Yahoo, the report states. Yahoo's Asia assets and investments, meanwhile, could be spun off or sold.
"We find a breakup would not yield compelling upside from the current stock price," the research report states.
Should such a breakup occur, Stanford Group's "sum-of-the-parts" assessment would give Yahoo a value of $20 to $24 a share.