Why Yahoo Stock is Down

[GUESTID]

Here it is

Sold Kelkoo at a loss of 400 Million Euros (including profit) even though Kelkoo was Profitable !!


Source - http://www.ft.com/cms/s/0/96d4b576-b83a-11dd-ac6d-0000779fd18c.html

[venturefox]

Erm, that's part of the reason why but there's also the advertising deal that fell through with Google, their fight to stop the Microsoft takeover and the departure of it's CEO Jerry Yang recently. You might want to think your post title's through a bit more in future.

[dmi]

Everything is down... It's no surprise that Yahoo is down too. There have been some turbulences in Y!, especially when the CEO resigned.

[johnkhoo]

This is the worldwide effect. Economy is bad and consumer spending is less, Which mean less spending on advertisement too. Therefore, companies business dropped.

[Nightmare Genesis]

Everything is down, Yahoo's losing it.

[bgyonline]

If Microsoft wanted to, they could swoop back into negotiations with Yahoo! and gobble them up in an acquisition for $11 a share. It's only 6 months later and 1/3 the price.

[Caesar1]

Yeah most of the media companies are down because of adds

[Adulu]

Google stock is down too.

[diggme]

Baidu stock is down too.

[MDArcade.Com]

every stock is down somehow google, yahoo...

[RightMan]

The financial markets world over are down and majority of the companies' shares have taken a beating....

Why does one single out just Yahoo !!! ?

Regards,

RightMan

[GoGlobal]

Not only Yahoo Everything is down.....

[Avani]

Pretty much everything is down.
I think there is a nice buying opp right now for blue chips, I don't know about buying Yahoo right now?

[CaseyPC]

The Yahoo stock dropped dramatically after they decided not to sell to Microsoft. It was around $22, after they announced they were not selling to Microsoft it dropped to about $10.

[wisdomtool]

Yahoo did drop a lot but it is still not too bad, considering that Google also dropped to below $300 and a lot of financial companies and banks had 95% of their values wiped off. Compared to this Yahoo is doing quite well. Dow Jones has dropped from a high of more than 13000 to 8635 as at yesterday. I would say Yahoo mirrors the market performance.

[Axel1975]

The MAIN reason Yahoo shares are down has little to do with the overall bear market or even the recession. Whenever a company shows weakness, and in Yahoo's case declines a deal with a large competitor (MSFT) only to end up with no better plan you will see a HUGE discount even compared to cash flow value.

Who want's to invest in a company that can't make money, seems to be without direction and NOW Who's competitors won't even re-offer a buyout deal at 1/2 the valuation of an original offer that was on the table less than 6 months ago?

Will Yahoo keep slipping without direction and a industrially sound CEO? YES.
Is there a potential 100% upside when they announce a CEO/and/or a buyout and show the market that they are a viable company (Make their assets transparent/show cash flow and willingness to cut out parts that don't pull their weight)YES!

[wisdomtool]

I would agree with your assessment. But with regards to the buy out offer, I just feel that Microsoft is playing a little hard to get so as to get even better pricing. Even that Google drop out of the race. Microsoft is the sole viable buyer for Yahoo. Given the current weakness in the general market, I would expect Microsoft to drive a hard bargain, especially after the rejection the last time.

The MAIN reason Yahoo shares are down has little to do with the overall bear market or even the recession. Whenever a company shows weakness, and in Yahoo's case declines a deal with a large competitor (MSFT) only to end up with no better plan you will see a HUGE discount even compared to cash flow value.

Who want's to invest in a company that can't make money, seems to be without direction and NOW Who's competitors won't even re-offer a buyout deal at 1/2 the valuation of an original offer that was on the table less than 6 months ago?

Will Yahoo keep slipping without direction and a industrially sound CEO? YES.
Is there a potential 100% upside when they announce a CEO/and/or a buyout and show the market that they are a viable company (Make their assets transparent/show cash flow and willingness to cut out parts that don't pull their weight)YES!

[Axel1975]

I would agree with your assessment. But with regards to the buy out offer, I just feel that Microsoft is playing a little hard to get so as to get even better pricing. Even that Google drop out of the race. Microsoft is the sole viable buyer for Yahoo. Given the current weakness in the general market, I would expect Microsoft to drive a hard bargain, especially after the rejection the last time.

I do see your point. BUT why would anyone buy Yahoo as long as they are on the ropes?

At a bottom out price both Ask.com, MSFT as well as major marketing firms and Venture Capital companies could buy the parts (Which is what they want. No one want's to buy ALL of yahoo if they can avoid it) cheaper than the whole..

Of course there is a price that Microsoft, Ask.com, Blackstone etc will pay for Yahoo, just based on cash flow. But trust me, that price is MUCH lower than any Yahoo shareholder would ever want to see..

Hell, even I personally could structure a deal (with Vencap finance and Banks) for Yahoo at around $3 a share!

[bread102]

the world is in the crapper in financial terms, theres nothing you can do to stop some companies from losing some $$

[Axel1975]

If I had a corner in Yahoo, I would NOT wait for a takeover from Microsoft or Venture Capital firms. The value of Yahoo's traffic and customer contacts/leads alone could drive a cashflow that at a very conservative valuation could buy the entire company at $5-$8/share.

I will go as far as saying that Yahoo's web properties ALONE (Yahoo.com + National + Services) with the right financial backer could carry the valuation of the entire company! (at cash flow valuation of maybe 20x monthly EBITA revenue). And then a buyer would have the rest of the 'junk' and the war chest to just play with/sell off.

BUT, unfortunately the current/previous board and CEO has made NOTHING to create a transparency of the company assets, and now here we are!

[snvc]

What a sight! The founder of Yahoo got kicked out.

[wisdomtool]

Microsoft will want their search engine. Whether is it useful or not is another issue. At this moment, Microsoft will do anything that can even vaguely promises some competition with Google.

IMHO, if Yahoo lost with that engine, I don't see how Microsoft is going to win with the same engine. Putting together both their search engines will be a nightmare for any software team.


If I had a corner in Yahoo, I would NOT wait for a takeover from Microsoft or Venture Capital firms. The value of Yahoo's traffic and customer contacts/leads alone could drive a cashflow that at a very conservative valuation could buy the entire company at $5-$8/share.

I will go as far as saying that Yahoo's web properties ALONE (Yahoo.com + National + Services) with the right financial backer could carry the valuation of the entire company! (at cash flow valuation of maybe 20x monthly EBITA revenue). And then a buyer would have the rest of the 'junk' and the war chest to just play with/sell off.

BUT, unfortunately the current/previous board and CEO has made NOTHING to create a transparency of the company assets, and now here we are!

[Axel1975]

the world is in the crapper in financial terms, theres nothing you can do to stop some companies from losing some $$

I am sorry, but that is just a stupid opinion.. Are you saying that companies (ALL?) are loosing money?

Of course you can run a profitable company even in a recession, hell even in 1929 there were millions of companies that were doing well..if not better!

Debt collection agencies, repossession businesses, Campbell, McDonald's, Burger King, Used Car Salesmen, Insurance Brokers, Interest Rate bearing assets Brokers, Pawn Shops, Discount Warehouses etc. etc.. are ALL doing GREAT!

Sure, there are sectors that as a 'whole' are doing a lot worse BUT there are always opportunities for well run businesses to gain market share in a period of financial distress!

[wisdomtool]

Exactly! In a booming economy, growth stocks are the ones to buy, in a recession, there are defensive stocks for you to maintain the value of your portfolio, not all stocks go down together, some thrive in a recession as Axel has pointed out.

I am sorry, but that is just a stupid opinion.. Are you saying that companies (ALL?) are loosing money?

Of course you can run a profitable company even in a recession, hell even in 1929 there were millions of companies that were doing well..if not better!

Debt collection agencies, repossession businesses, Campbell, McDonald's, Burger King, Used Car Salesmen, Insurance Brokers, Interest Rate bearing assets Brokers, Pawn Shops, Discount Warehouses etc. etc.. are ALL doing GREAT!

Sure, there are sectors that as a 'whole' are doing a lot worse BUT there are always opportunities for well run businesses to gain market share in a period of financial distress!

[Axel1975]

Microsoft will want their search engine. Whether is it useful or not is another issue. At this moment, Microsoft will do anything that can even vaguely promises some competition with Google.

IMHO, if Yahoo lost with that engine, I don't see how Microsoft is going to win with the same engine. Putting together both their search engines will be a nightmare for any software team.

You have a very valid point. I just 'know' that Microsoft are smart enough to understand that Google will NEVER be allowed to buy Yahoo or any parts of their search engine tech (NO way that the U.S. gov allows 75% market leader to purchase Nr2).

And since that 'cannot' happen, they can bide their time with Yahoo. Microsoft are also bidding VERY heavily for Search Engine dominance in the Mobile sector and actually doing a fairly good job competing with Google in that niche.

Does Microsoft want Yahoo's share of search/web services? YES. Are they willing to pay a 'Premium Price' for it? I think not!

[Axel1975]

Everything given. I DO think that an investment in Yahoo at today's price might be a VERY sound investment seen over 14-72 months. For anyone wanting to invest I would recommend either purchasing when the stock breaks the $12.00-$12.30 resistance level (short term) or buy if the share hits around $9 (Short/Long Term).

I think everything considered that a 'chop-value' (Selling assets) for Yahoo could be around $20/share and a long term 'best case scenario' might bring around $40 in 2-3 years with the right management.

[yawez.com]

I think they made a great desicion in selling it, their profits would have dramatically decreased if they did not have sold it.

[yawez.com]

I think they did good selling it. Their profits would have decreased if they did not sell it.

[Ownageplocks]

dang, thanks for the source