What do you think will happen with YHOO stock?

Question

Nice article in Wall Street Journal today... the stock is off 30% and just recently bounced off a multiyear low.. Looks like a shake up is on the verge... perhaps change in upper management.. a big merger...further acquisitions... a buy out??? Many options... the stock now sits at 26.9... trailing GOOG in search and fading... can it recover?? Will it?? How???

Answer 1

It'll continue its decline until they finally realize that they have to back up their products with some actual quality and consistency.

For example, that crud they call yahoo mail beta is so 90's. What are these people thinking? Consistency issues even keeping Yahoo Finance up. These are not indications of a strong company.

You make good observations. Investors see this too. Yahoo keeps using bandaids. Google continues to create and evolve with Gmail, picasso, Google maps, etc.

That said, it looks like it's about ready to pull back to 25, maybe 23 again. I guess we'll see!

Answer 2

Personally, I think that Yahoo will look to merge with/acquire or be acquired by, a media content company. Yahoo has clearly lost the battle with GOOG over search, but YHOO does still have some sticky products. Yahoo Finance is so much better than Google's finance site. Yahoo gets people to pay for advanced mail options and real-time scoring in fantasy games. Imagine if YHOO and CBS merged, for instance and YHOO could get you to pay to watch live CBS shows on its site. (CBS was just the first media company that came to mind, but you catch the drift). Any yes, I know that GOOG just bought YouTube, but I'm talking a more traditional media content provider.

This said, I was just looking at some of YHOO's statistics (on Yahoo finance) and the shares are still rather expensive. When I was younger, I used to scoff at things like P/E and P/E/G ratios and I lost a lot of money in the tech bust. So, looking at the rich valuation and given a concern of adequate growth drivers, I would not be a buyer of the shares, even though I think that they will do a deal with a content provider.

Answer 3

I don't own YHOO, but I have to say I would consider owning. It is the #1 website in the world. Here we are using Yahoo's services for free. The internet is only growing more popular, more advertising dollars. That said, there are other investments that I like more - in technology I like LVLT.

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Good luck!