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lmrhoades
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 Posted: Tue Apr 22, 2008 2:42 pm Post subject: Yahoo (YHOO) |
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Henry or Anyone think YHOO at these prices now with earnings out is a guaranteed $3-4 per share with the looming MSFT bid ending Saturday....any thoughts?
Seems like a easy 10-15% gain
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HenryTo
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Location: Los Angeles, California
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| Posted: Wed Apr 04, 2012 12:03 pm Post subject: |
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Morningstar leaves its fair value for YHOO unchanged. More details to follow.
| Quote: | | Yahoo YHOO announced a significant layoff Wednesday, revealing that it plans on eliminating approximately 2,000 jobs, or about 14% of its employee base. This step is the first of many that we expect new CEO Scott Thompson to make as he tackles the dual tasks of managing shareholder discord and attempting to take the company in a more focused direction. For now, we are waiting to hear more from Thompson regarding what he thinks will be Yahoo's key priorities, and we are not changing our fair value estimate. |
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HenryTo
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| Posted: Thu Dec 22, 2011 5:47 pm Post subject: |
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Morningstar's latest on YHOO.
| Quote: | | Several reports have surfaced that Yahoo's YHOO board of directors is considering a deal to offload the company's financial interests in Yahoo Japan and Alibaba Group--a positive development, from our perspective. We advise investors to proceed with caution, as a deal has not been finalized. Given Yahoo's record, we do not believe the potential upside is sufficient for us to recommend an investment, although it is likely we will modestly increase our $17 fair value estimate if an attractively structured deal materializes. The potential transaction may be structured as a cash-rich split-off, whereby Yahoo exchanges its financial interests in Yahoo Japan and Alibaba for interests in newly created companies consisting mostly of cash (although at least 33% of the valu e in the entity will be noncash). While the structure is complex, it would allow Yahoo to avoid significant tax liabilities that a more traditional sale would incur. We strongly believe that Yahoo will need to return most of this cash to shareholders in order to realize the maximum value of a deal. Additionally, we would view any significant delay in Yahoo's ability to return cash as a negative for the company. Although we view a potential deal as a positive, Yahoo is still facing significant issues in its underperforming core business. As a significant Internet company, its advertising revenue growth has lagged the market while companies like Google GOOG and Facebook have continued to attract more attention from large advertisers and agencies. Furthermore, the company still is without a CEO in the midst of a turnaround. We look forward to the day when Yahoo has a clear direction for growth and inve stment. Until then, we see more risk than reward in its core business. |
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HenryTo
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Location: Los Angeles, California
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| Posted: Fri Dec 02, 2011 1:53 pm Post subject: |
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Morningstar on YHOO:
| Quote: | | It's business as usual as Yahoo YHOO buyout rumors abound. This week, we believe several parties have expressed more formal interest in purchasing at least a minority position in the Internet company. As the company is trading close to our fair value estimate, we still believe there is not a high degree of likelihood that existing shareholders will see a great deal of upside from here. We are not strong supporters of a deal whereby Yahoo sells a minority interest in the company, even if the cash is returned to shareholders in the form of a special dividend or a share buyback. In our eyes, Yahoo faces two distinct problems: (1) a core Internet business that is losing audience, market share, and its competitive position with advertisers and (2) a substantial holding in Alibaba Group, a privately held company that would trigger a large tax liability if sold. First, we believe Yahoo's core business has been largely rudderless, even with the substantial progress the company has made in cost cutting over the past year. Revenue growth has continually lagged the overall online advertising industry, and its weakness in search is becoming a drag on the company. Furthermore, with its more than $2.5 billion in cash on the balance sheet, we do not expect a change in the capital structure to strengthen Yahoo's competitive position. Because the management team has been very publicly attentive to driving a deal, we believe the distraction has harmed the overall business as companies like Google GOOG and Facebook have been able to deliver a clearer message to advertisers. Second, selling a minority interest in the company does not represent any progress in selling Alibaba Group, in our view. In other words, we would not expect this type of transaction to alter our tepid view of Yahoo's potential for stock price appreciation. A transaction led by Alibaba Group chairman Jack Ma for a full buyout of Yahoo may be the most interesting possibility, but a potential deal faces many roadblocks. It's not clear how regulators may view a sale of a U.S. Internet company to one based in China, particularly given the skepticism about privacy policies and censorship. While this skepticism may be misplaced, similar fears have derailed merger and acquisition deals in the past. Furthermore, the board of directors may be leaning toward a partial sale rather than a full sale in order to buy time for a potential turnaround of Yahoo's core business. However, we don't think buying time is an acceptable strategy. |
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HenryTo
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| Posted: Wed Sep 07, 2011 1:21 pm Post subject: |
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Morningstar not mincing words on the latest departure of YHOO's CEO:
| Quote: | | Yahoo's YHOO board of directors officially removed Carol Bartz as CEO on Tuesday. Although the stock price has reacted positively to the news, we see very little to get excited about and don't view this change as one that enhances value for shareholders. CFO Tim Morse will serve as interim CEO until the board finds a replacement. Yahoo continues to face two challenges: realizing appropriate value for its Asian holdings (Alibaba Group and Yahoo Japan) and turning around its core business. In the meantime, rumors are circulating that the company is pursuing strategic alternatives, including an outright sale, or even a potential acquisition of AOL AOL or Hulu. We've long recognized that there is considerable value tied up in Alibaba Group and Yahoo Japan, but we believe the structural challenges in realizing this value remain. While an optimistic buyer could ultimately bail out Yahoo shareholders, there is meaningful risk in waiting for a deal. Managing the core business while dealing with the heightened uncertainty for the employees and partners of Yahoo will be nontrivial, particularly as the company is attempting to refocus its sales efforts and deliver a clear message to potential advertisers. We would expect Yahoo's advertising growth to continue to lag the overall industry, a troubling outcome for this former powerhouse. If Yahoo's core business keeps underperforming, no amount of cost controls can enhance shareholder value. If the company does enter into a prolonged effort to sell itself, we would expect continued lack of direction, employee turnover, and poor growth. Investors should also keep in mind that many members of the core management team were hired in the past two years under Bartz's watch. As a stand-alone company, it's unlikely that Yahoo would have the ability to dramatically change its fortunes. We would discourage investors from allocating any new investment to Yahoo stock at this time. |
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HenryTo
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| Posted: Wed Apr 21, 2010 2:07 pm Post subject: |
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Morningstar on YHOO's 1Q earnings:
| Quote: | | We're maintaining our fair value estimate for Yahoo YHOO after the company reported first-quarter results that were in line with our expectations. Companywide revenue grew 1%, the first quarter of growth since the third quarter of 2008, compared with our 5.5% growth forecast for the year. The back half of 2010 should be stronger than the first half, thanks to moderations in search revenue declines. In the first quarter, display advertising was especially impressive, growing 20%--this segment's best performance since late 2007. Echoing comments from Google GOOG and Omnicom OMC, management noted particular strength in large brand advertisers, another indication that advertising is back. Still, we don't expect robust display ad revenue growth over the long run, as we think Yahoo will gradually lose market share (unique visitors, time spent, page view, and so on) to social networks and niche Web properties. As a result, we expect more display advertising dollars to shift to Facebook and lower-priced ad networks, respectively, as advertisers follow this traffic. Yahoo is also losing share of Internet search, leading to search revenue declines of 14% during the quarter, compared with 20% growth for Google. We forecast Yahoo's top line to trail the industry as a result of continued market share declines. Excluding one-time items, Yahoo's operating margin improved to 9.3% from 6.7% a year ago. We project a 2010 operating margin of 9.3% and a 10.3% average over the next three years. |
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HenryTo
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| Posted: Wed Jul 29, 2009 11:16 pm Post subject: |
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Hi teenwolf,
Welcome to the board (belatedly)! I'm glad you've started investing and are posting your picks & analyses. Keep up the good work!
Henry |
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teenwolf41
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Posts: 10
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| Posted: Wed Jul 29, 2009 9:40 pm Post subject: |
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| Wonder what Icahn thinks after today. $31 per share looks pretty good right about now. |
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HenryTo
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idiotinc
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| Posted: Mon Nov 17, 2008 8:16 pm Post subject: |
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Jerry Yang has resigned from his position on the board of directors of Yahoo! I've posted the internal memo he sent out on my website:
Jerry Yang Resigns
Yang was pretty universally hated after he rebuffed Microsoft's offer, but I've definitely seen worse CEOs. I'll be interested to see who is selected as his successor. |
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HenryTo
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HenryTo
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| Posted: Tue Jun 03, 2008 1:22 pm Post subject: |
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FYI - Icahn now taking this to the next level:
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Icahn to seek removal of Yahoo CEO Yang: report
Tuesday June 3, 3:12 pm ET
NEW YORK (Reuters) - Billionaire investor Carl Icahn would seek to remove Jerry Yang as chief executive of Yahoo Inc (NasdaqGS:YHOO - News) if Icahn succeeded in a proxy battle against the company over its failure to reach a deal with Microsoft Corp (NasdaqGS:MSFT - News), The Wall Street Journal reported on Tuesday.
Icahn has proposed an alternate slate of directors for Yahoo's board, but has yet to directly target Yang over the breakdown in talks early this month for a $47.5 billion deal.
"It's no longer a mystery to me why Microsoft's offer isn't around," the Journal quoted Icahn as saying. "How can Yahoo keep saying they're willing to negotiate and sell the company on the one hand, while at the same time they're completely sabotaging the process without telling anyone?"
Icahn cited details from court documents related to a shareholder suit that were unsealed on Monday. The documents showed how Yahoo had taken steps to rebuff a Microsoft takeover bid months before the software maker made its offer public on February 1.
The shareholder lawsuit argued that Yahoo had taken aggressive steps to block a deal, including the adoption of a costly plan to retain employees, leading up to a breakdown in negotiations.
The Journal said Yahoo's board was due to meet on Tuesday. Icahn and Yahoo officials were not immediately available.
Yahoo shares were down 35 cents or 1.3 percent to $26.05 on the Nasdaq |
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HenryTo
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HenryTo
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HenryTo
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| Posted: Sat May 03, 2008 6:46 pm Post subject: |
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Steve Ballmer's letter to Jerry Yang:
May 3, 2008
Mr. Jerry Yang
CEO and Chief Yahoo
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Dear Jerry:
After over three months, we have reached the conclusion of the process regarding a possible combination of Microsoft and Yahoo!.
I first want to convey my personal thanks to you, your management team, and Yahoo!'s Board of Directors for your consideration of our proposal. I appreciate the time and attention all of you have given to this matter, and I especially appreciate the time that you have invested personally. I feel that our discussions this week have been particularly useful, providing me for the first time with real clarity on what is and is not possible.
I am disappointed that Yahoo! has not moved towards accepting our offer. I first called you with our offer on January 31 because I believed that a combination of our two companies would have created real value for our respective shareholders and would have provided consumers, publishers, and advertisers with greater innovation and choice in the marketplace. Our decision to offer a 62 percent premium at that time reflected the strength of these convictions.
In our conversations this week, we conveyed our willingness to raise our offer to $33.00 per share, reflecting again our belief in this collective opportunity. This increase would have added approximately another $5 billion of value to your shareholders, compared to the current value of our initial offer. It also would have reflected a premium of over 70 percent compared to the price at which your stock closed on January 31. Yet it has proven insufficient, as your final position insisted on Microsoft paying yet another $5 billion or more, or at least another $4 per share above our $33.00 offer.
Also, after giving this week's conversations further thought, it is clear to me that it is not sensible for Microsoft to take our offer directly to your shareholders. This approach would necessarily involve a protracted proxy contest and eventually an exchange offer. Our discussions with you have led us to conclude that, in the interim, you would take steps that would make Yahoo! undesirable as an acquisition for Microsoft.
We regard with particular concern your apparent planning to respond to a "hostile" bid by pursuing a new arrangement that would involve or lead to the outsourcing to Google of key paid Internet search terms offered by Yahoo! today. In our view, such an arrangement with the dominant search provider would make an acquisition of Yahoo! undesirable to us for a number of reasons:
-- First, it would fundamentally undermine Yahoo!'s own strategy and long-term viability by encouraging advertisers to use Google as opposed to your Panama paid search system. This would also fragment your search advertising and display advertising strategies and the ecosystem surrounding them. This would undermine the reliance on your display advertising business to fuel future growth.
-- Given this, it would impair Yahoo's ability to retain the talented engineers working on advertising systems that are important to our interest in a combination of our companies.
-- In addition, it would raise a host of regulatory and legal problems that no acquirer, including Microsoft, would want to inherit. Among other things, this would consolidate market share with the already-dominant paid search provider in a manner that would reduce competition and choice in the marketplace.
-- This would also effectively enable Google to set the prices for key search terms on both their and your search platforms and, in the process, raise prices charged to advertisers on Yahoo. In addition to whatever resulting legal problems, this seems unwise from a business perspective unless in fact one simply wishes to use this as a vehicle to exit the paid search business in favor of Google.
-- It could foreclose any chance of a combination with any other search provider that is not already relying on Google's search services.
Accordingly, your apparent plan to pursue such an arrangement in the event of a proxy contest or exchange offer leads me to the firm decision not to pursue such a path. Instead, I hereby formally withdraw Microsoft's proposal to acquire Yahoo!.
We will move forward and will continue to innovate and grow our business at Microsoft with the talented team we have in place and potentially through strategic transactions with other business partners.
I still believe even today that our offer remains the only alternative put forward that provides your stockholders full and fair value for their shares. By failing to reach an agreement with us, you and your stockholders have left significant value on the table.
But clearly a deal is not to be.
Thank you again for the time we have spent together discussing this.
Sincerely yours,
/s/ Steven A. Ballmer
Steven A. Ballmer
Chief Executive Officer
Microsoft Corporation |
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HenryTo
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| Posted: Sat May 03, 2008 6:39 pm Post subject: |
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Plays like this - while it looks easy on the surface - have inherent risks that are always hard to quantify unless you're an insider. There is a reason why the share price stalled at under $30 last Friday.
http://www.bloomberg.com/apps/news?pid=20601087&sid=anuVzhuK2Cf4&refer=home
Last edited by HenryTo on Sat May 03, 2008 6:46 pm; edited 1 time in total |
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