I made a killing in an Inkling prediction market this past weekend when the MicroHoo talks went down the tubes: Will Microsoft announce a successful buyout of Yahoo! in 2008?. I started shorting the deal last week at $84, and just kept buying all the way down.
I have no idea how the corporate world works, and how you are supposed to consummate these sorts of deals. For all I know it's against the law to talk to the buy-out target before the fact. Regardless, I think the whole notion is stupid. Think how much better this would have gone in a transparent world? Where Steve sends Jerry an email, or even better-- a tweet, and says, "Can we talk? I want to share an idea we've had with you." Then they get together over a beer, "discover" that they have pretty different cultures, that there are significant barriers, and that maybe it wasn't such a good idea after all.
Maybe things just aren't done that way in business-- how would I know? We don't deal in numbers that big in academia. I do know that a little transparency might have led to a whole lot more trust, and if the deal couldn't be made at least they wouldn't be facing such a brutal and very public failure.
Regardless, their failure catapulted me into the top 100 traders at Inkling, and on to the leader-board for the week. And for that I am thankful!