2006-11-05 13:21:47 · 7 answers · asked by CSK 2 in Business & Finance ➔ Investing
Yahoo is being taken to the cleaners by Google. Google is a better managed more diversified company that is beating them in every area right now.
Yahoo does have value, it has a large cash holding and I might even buy some if the price drifts down to the low $20's. They are working on a new algorithm for their search engine which will make it work more effectively and allow them to take some ad dollars back from Google. The project has been delayed a couple of times but should be live by early next year. That means the first couple of quarters next year should be more impressive than this year.
There is also a floor under the stock - if Yahoo falls too far there will be a takeover bid. There are not that many search engines out there. Microsoft is normally mentioned, but companies like Disney, Viacom or even Time Warner would be interested. However whatever happens Yahoo will NOT be going back to $356. Those days are over.
2006-11-07 00:30:46 · answer #1 · answered by popeleo5th 5 · 0⤊ 0⤋
Yahoo was never worth that much. When Yahoo hit $225 I did a calculation of what would have to occur for it to justify that price.
To be worth $225, Yahoo would have to had been the sole source of all advertising revenue in the United States. Further, despite having a 100% monopoly on all advertising, its margins could not have narrowed. Further, the revenue growth rate for national advertising would have had to persist and no competition could have entered the market.
Yahoo is overvalued at its current price. It isn't beaten up, it is flying high by any historical standard and by any estimate of value unless you plan on a really low return.
2006-11-05 14:44:39 · answer #2 · answered by OPM 7 · 1⤊ 0⤋
A few years ago, almost all tech stocks traded for $356.
2006-11-05 13:25:10 · answer #3 · answered by vinny_the_hack 5 · 0⤊ 0⤋
A few years ago there was something called a "tech bubble" most tech stocks were overpriced and many went bankurpt after having sky high stock prices.
Yahoo is lucky its still in business
2006-11-06 00:33:57 · answer #4 · answered by stockmarketwiz21 2 · 1⤊ 0⤋
Did you forget the tech bubble bursting
2006-11-05 14:41:49 · answer #5 · answered by t b 2 · 0⤊ 0⤋
One word. Google
2006-11-05 13:23:19 · answer #6 · answered by shakopcool 3 · 0⤊ 1⤋
competition
2006-11-05 13:23:51 · answer #7 · answered by ? 7 · 0⤊ 0⤋