It’s been almost three months since Microsoft (Ticker: MSFT) made its $31-a-share bid to buy Yahoo! (Ticker: YHOO) and the drama surrounding the proposed deal seems to have no end.
Other possible suitors, like News Corp. (Ticker: NWS) have stepped up to the plate and could complicate matters. News Corp. owns the popular social networking Website MySpace.
Then there’s AOL. Remember them?
Yahoo! was reportedly close to an agreement to buy the once-upon-a-time juggernaut from its current owner Time Warner (Ticker: TWX). In the end, Time Warner would get a 20 percent stake in Yahoo! and the right to buy more shares in the company at a higher price than Microsoft’s proposed offer of $31.
How can investors profit from the dizzying array of possible outcomes?
One smart way is to forget playing guessing games and to simply own a technology exchange-traded fund (ETF) with market exposure to the key players.
The Technology Select Sector SPDRs (Ticker: XLK) and the Vanguard Information Technology ETF (Ticker: VGT) both have a broad collection of technology stocks, along with exposure to Microsoft, Google, and Yahoo!.
If you believe Yahoo! will end up in the hands of a media giant, the Consumer Discretionary SPDRs (Ticker: XLY) contains News Corp. and Time Warner.
XLK just follows technology stocks that are members of the S&P 500 and VGT follows an all technology index assembled by MSCI.
Technology has been one of the hardest hit industry sectors this year. Through the April 11th market close, XLK is off by 15.3 percent and VGT is down 14.7 percent.
If you’ve ever wanted to own technology stocks the time to go shopping is when they’re down and out – not when they’re touching all time highs.
Technology ETFs are an excellent way to play the buyout soap opera, no matter who ends up owning Yahoo!.
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