Yahoo! Shares Stumble Below $20

SAN FRANCISCO - Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) shares have slumped below $20 for the first time since Microsoft's(MSFT Quote - Cramer on MSFT - Stock Picks) buyout bid five months ago that was ultimately withdrawn.

Yahoo!'s stock soared as high as $29.98 in February when a merger with Microsoft seemed all but inevitable, but plunged to $23.52 on June 12 when it became apparent that the two companies couldn't reach an agreement.

The only lift the stock has received since then is on new rumors emerging that a deal might still be in the works.

But on Tuesday, hopes for that possibility seemed dashed as Yahoo!'s price hovered near its close of $19.18 on Jan. 31, before Microsoft went public with its unsolicited bid.

Shares of Yahoo! were recently trading at $19.77, down 89 cents, or 4.3%.

Steve Weinstein, an analyst for Pacific Crest Securities, notes that the overall market has moved into bear territory -- and Yahoo! has been dragged along with it. Added to that is shareholder concern that the tech giant's second-quarter results will be light.

To top it off is the uncertainty surrounding the direction of the company. Yahoo! recently reorganized its management team but at a time when it continues to bleed talent at its highest ranks.

Then there's the annual meeting on Aug. 1, when shareholders must decide whether to retain Yahoo! current board or replace them with a dissident slate put together by billionaire investor Carl Icahn, who is still gunning for a Microsoft merger.

"It is an asset with a lot of value, but it needs to get past the board elections," says Weinstein, who has a neutral rating on Yahoo!. "Right now, you don't know."

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