Tue 24 Jun 2008
Techcrunch has posted more news about Microsoft and Yahoo Talking, again… I hope a deal sees the light soon, because, I think Yahoo on its own will probably soon see $15 a share and then fall steadily lower to under $10 a share. I do not know much about stocks, but this just seems like it will be this way in the near future.
My advice (if it mattered): Microsoft and Yahoo, do not bitch out on shareholders again, get the job done!
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June 24th, 2008 at 3:57 pm
I wonder how you got the $15 and $10 figures.
As a business, YHOO actually makes money. Yes, they don’t make money as fast as GOOG and they’ve gotten too fat, but does that mean they’re going to go bankrupt without MSFT? I doubt it.
I think the market is really depressed and the shareholders are tired of losing portfolio value, but YHOO will bounce back up because at the end of the day fundamentals prevail.
This might be a good buying opportunity.
June 24th, 2008 at 4:37 pm
Thanks for dropping by Danny. Glad to hear your thoughts. While I do agree with you in some aspects, I do not agree that YHOO can do well on its own, unless major changes happen with the board of directors.
I do agree with you that if the MSFT deal does not happen, YHOO will probably not go bankrupt. Aside from that, I have seen their stock slowly tumble from high $30 a share (where I jumped on the good ol’ YHOO bandwagon) right down to a recent $20 something a share.
You are correct though, me as a shareholder… I am tired, frankly pissed, about losing almost 50% of my holding value. If the MSFT deal does not happen, I am sure to lose more of my investments value until something big happens, if something big happens! The Icahn deal probably would not benefit the company too well, but who knows…
P.S. The $10 to $15 range is something I came up with as a thought. As I said, I am not wholly knowledgeable about stocks and investing. Therefore, I hope I am 110% wrong, I would love to see this stock go up to $500 a share, but it is NOT going to happen if YHOO does the GOOG deal.
Oh, and remember, only properly executed fundamentals prevail… Think about it…
June 24th, 2008 at 5:43 pm
One last thing that I meant to include in my last comment was that the only thing that is keeping the stock above $20 a share at this moment are the MSFT acquisition RUMORS. If you were watching the stock yesterday and today, you could see that it was slipping closer to the 52 week low until the MSFT acquisition RUMORS came back into play.
Also, you are probably right though, this would be a good time to pick up more stock it is cheap and if MSFT follows through with the buyout they would obviously pay a premium for the shares. Unfortunately, I am tapped out on tech stocks due to YHOO’s shortcomings in the past 2 and 1/2 years.
June 24th, 2008 at 9:48 pm
you are absolutely right that investors are still hoping that the MSFT deal will go through and that’s shown in the stock price.
While I agree that in the near future, the stock price could go to 15 or 10 or even lower since the market has lost confidence in the management, I believe that in the long run it will go back to above 35.
Steve Ballmer offered 33/share for the whole company, that means YHOO is worth more according to his valuation since a good businessman always pays for less than the value of what he’s buying.
About fundamentals (condition of the business), if you look at key stats on Yahoo! FInance(http://finance.yahoo.com/q/ks?s=YHOO), you’ll see that the debt is significantly lower than cash. It’s even lower than the free cash, which means that YHOO will have no problem paying off the debt if its creditor demands all payment today.
Quarterly revenue growth is pathetic (8.70%) compared to GOOG’s (41.50%), but it’s still growing.
That’s why I think YHOO is being “punished” unfairly, which is good for the company since it has lost its focus and gotten too fat.
I do believe that if we(I own some too) stay long enough, as long as the business is still making money, we’ll see a payoff.
June 24th, 2008 at 10:08 pm
Now that you have clarified more of your thoughts / statements, I can say that I pretty much agree with you. My biggest concern is YHOO giving in to GOOG, I think that would be a turn in the wrong direction if they want to grow YHOO’s stock value in the direction GOOG went.
If management can become organized, or are forced to become organized by losing their positions there can be a chance to recover YHOO market position.
I withheld my votes for the whole board of directors; you can read more at http://breakoutperformance.blogspot.com/
Anyway, I have been in this for over 2 1/2 years, through thick, thin and worse. All I can do is wait. If YHOO sells to MSFT for $30 something a share, I will lose between $9 and $11 per share. If YHOO can figure out another way to get shareholder value back, without selling in full, maybe a partial buy-out is in order, then there can be a chance that this stock with even back out to its real value, or higher.