Yahoo Stock Drops Close to the Perilous $10 Mark–Uh-Oh
by Kara Swisher
Posted on November 12, 2008 at 2:28 PM PT
Today, Yahoo shares plummeted almost nine percent to close at $10.34, off $1.01, in yet another freefall that has all sorts of disturbing implications for the troubled Internet company.
For one, it makes the merger possibilities with Time Warner (TWX) online unit AOL that much more difficult.
Yahoo’s market cap is off another billion dollars to $14.3 billion right now, and that has a big impact on how much it can pay to own AOL. If at all, that is.
In addition, the options of Yahoo (YHOO) employees are so under water as to be Atlantis, which is sure to make it harder–even in this weak economic environment–to retain and attract talent.
At the very least, it creates a very gloomy Yahoo corporate campus in Sunnyvale.
And while shares of all tech giants were off yesterday, part of the continuing worry about the advertising market online, Yahoo’s drop was significantly more than the others.
It reflects a deep worry among investors about the prospects of its current leadership under CEO Jerry Yang to pull off a much needed turnaround.
If Yahoo shares drop below $10 a share (remember the halcyon days only a few months ago, when the $20-a-share Rubicon was scary?), it creates a very ironic situation.
That being that the company is a true bargain for a buyer interested in scooping up one of the Internet’s still most-trafficked properties, except that not many have the wherewithal in this financial meltdown to pay up.
Except, of course, for Microsoft (MSFT), which has expressed so much disinterest in buying Yahoo as to be pathological about it.
Instead, in its continuing obsession with messing with archrival Google (GOOG), it focuses on overpaying copiously for a search deal to get on the mobile phones of Verizon (VZ).
But at a $10-or-less price tag for a business that could still turbocharge his company’s even less impressive online search and advertising efforts, isn’t it time Microsoft CEO Steve Ballmer got some therapy to get over his Yahoo issues?
Comments
Kara,
I think the final thesis of your analysis misses the point. Sure, Ballmer could use a dose of reality, but he might just wait it out until Yahoo winds up around $8 a share, he’s got time on his side. Whereas Yang’s pathetic begging at the forum last week saying he always believed MSFT should buy YHOO is directly where the Yahoo problems begin and end. He has lost the confidence of everyone, save for Sue & Roy, short of that no one believes he is the right guy for the job. He has no strategy, no vision and no direction for the company. I’m still not sure why Yang is spending his time these days speaking at conferences ( I note he’s wasting valuable time in London today) You would think that a CEO that turned down nearly FIFITY BILLION DOLLARS, in favor of a market cap of $14b and change, and steadily heading south could find better use of his time then hanging out in London.
Posted by Mike Kane at November 12th, 2008 at 3:11 pmyang believes he is ‘raising the profile of yahoo’ by speaking at conferences, because every move he makes is dictated by a pr flak…what he’s actually doing is showing what a mess yahoo is…
Posted by Sam Harrison at November 12th, 2008 at 8:15 pmwhat is a yahoo?
Yikes A Hyped-up Overvalued Oracle
Posted by Sam Harrison at November 12th, 2008 at 8:19 pmIt was delightful to see Bill and Steve sharing a stage and reminiscing about their stuff, but I was surprised that Bill (gadgets) and Steve (widgets) didn’t settle the debate about the original inventor of the widget.
One can never have too many widgets. Somebody codes something you never even dreamed of wanting – suddenly everybody
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