Comments on: Is Yahoo Stock a Bargain?

By: jay hardy

jay hardy — Sun, 30 Nov 2008 15:19:55 +0000

from a standpoint of assets it is a bargain. Yahoo has $11billion in assets (after deducting for liabilities). At $10 a share with 1.29 billion outstanding shares you’d be paying only $900M over asset valuation. They still are making over $1 billion in annual profits so I don’t see the Icahn’s risk.
But, my viewpoint is one as a trader of it’s stock. And I’d have been out Friday with a 15% gain in a week. It’ll like spike higher with trader activity. (There were some 250K chucks sold Friday near the end of the session for $11.45- which has certainly NOT a retail trader).
Notice that the volume has been decreasing steadily (I know Friday was only a half-section) as the price has been spiking.
That’s usually a sign the stock is moving due to amateur trading– not the major institutional holders disposing or acquiring that accounts for 70% of Yahoo’s stock.
So that said if Icahn is “trading” he is smart. If he’s “investing” he’s not so smart.

By: Om Malik

Om Malik — Sun, 30 Nov 2008 14:52:16 +0000

@austinandrew

Fair enough. I guess we would have to see how he does in the future before making a final judgement. I am not buying his “expertise” on Yahoo for now. I think both in case of Motorola and Yahoo, he over paid and had clearly not seen how bad things were for these two companies. I think like many investors, they rely on advise from analysts who are really removed from the on-the-ground problems. Yahoo has a structural and cultural problem.

By: Xavier

Xavier — Sat, 29 Nov 2008 07:10:51 +0000

Yahoo’s a great company, as long as they stop trying to compare themselves to Google. If Icahn’s thinking of a new CEO that’ll cure their Google-obsession, then this is a brilliant move. But if it’s more of the same, the stock will go down to 4 or 5 and be stuck there like Sun has been for so long.

By: austinandrew

austinandrew — Fri, 28 Nov 2008 22:56:30 +0000

To say Icahn has a bad track record based on these two purchases isn’t saying much. Anyone who has bought into a company over the past year — Warren Buffet included — has lost money. But I would guess this is a good sign.

By: Ted Murphy

Ted Murphy — Fri, 28 Nov 2008 20:08:57 +0000

Sure, Yahoo is cheap here. Consensus for 2010 is $0.46, but I think a good CEO could triple that number in five years pretty easily.

By: Dave Mackey

Dave Mackey — Fri, 28 Nov 2008 19:07:52 +0000

Yahoo still has an amazing property and has a lot of opportunity to continue making it better. I’d say the stocks are a bargain…but then again, I don’t do stocks. :)

By: michael

michael — Fri, 28 Nov 2008 18:21:29 +0000

Bargain if a leader is brought in who can

1) focus all resources on mail, search, ads, and 3 content plays (news, sports, and finance) and kill or sell the rest really fast.
2) 100% product focused, stop the dealing and focus on what got us into this mess— way too much product compromise and no Yahoo! application experience.
3) change the culture— raise expectations from employees, top-down decision making, kill consensus decision making.
4) brings in new engineering talent

if the new yahoo leader does these 4 things the stock price will take care of itself.