Wednesday, November 02, 2011

Yahoo!: Digging Into So-Called Scoops

NEW YORK (TheStreet) -- Along with the broader market, Yahoo!(YHOO_) has been sacked this week.

It is now back to where it was trading in early October. Last week, Yahoo! was up more than 25% in the last month. It's now only up 13% for the last month. (Nasdaq is still up 7.6% for the last month.)
Don't get me wrong, I don't like that. It stinks, in fact.

However, let's take a step back from the ledge.
There were five things that were reported on with certainty last month that were not necessarily certain at all.
1. A couple of weeks ago, many media reports said that Jerry Yang told the AsiaD conference in Hong Kong that he wasn't going to sell the company. That was odd, as I was in the audience and don't recall him saying that at all. I forget his wording.
He might have said they weren't going to be a forced seller or they didn't have to sell if they didn't want to. He was saying they are playing from a strong hand. Maybe it was a bluff. Later on in the discussion, he said very clearly that they (the board) were going to do what was right for the shareholders. I took that to mean that -- just as everyone suspects -- this thing is still in the middle of a sales process.
2. A Wall Street Journal article a couple of weeks ago quoted some private equity bidders as saying they thought Yahoo! was only worth $16 to $18 a share in a buyout and was already over-priced at $15 as the stock was at $11 in August. Really? I think Apple(AAPL_) has a fair value of $25 a share. It's all hype and I'd really rather buy it at that price than $400.
3. A Bloomberg report on Friday night interrupted an otherwise pleasant dinner I was having. It quoted -- in its "scoop" - "5 unnamed sources" who said that Yahoo! was going to separate their Asian assets in a tax-free manner that would lead to a stock buyback or a dividend.

Read full post in TheStreet

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