6 ms·

Yahoo Closes At $13.76. What A Train Wreck.

16 points by jasonlbaptiste 18y ago

LPTS 18y ago
Maybe Jerry Yang should give Steve Ballmer a call and see if he's still game to buy Yahoo at 43 a share (or whatever it was).
kirse 18y ago
I hate how TechCrunch seems to idolize Google stock, as if its not going to be hovering at around $40-$50 in the next 18-24 months. The market in general is going to be coughing up some blood for awhile, and I'm going to bookmark this post and send it to Mr. Arrington when I'm proven right. I remember owning Yahoo at $300+ (which split) back during its high-flying days, and Google will be no different with its heavy reliance on advertising for revenue.
- SwellJoe 18y ago
  I'm curious why you believe GOOG will be trading at around 3 times earnings? That just doesn't even make sense to me, and I'm having a hard time imagining anything short of total economic collapse that could lead to such an unlikely scenario. While GOOG may not be bottomed out at ~$340 (I bought a few shares at $349, and am pretty happy with the price...and if it keeps dropping, I'll buy more, once it starts climbing again), I just don't see how you can possibly imagine it's a $40-$50 stock. Terrible companies trade at better than three times earnings, average companies trade at 10 times earning, and I don't think anyone is going to accuse Google of being a terrible, or even an average company. Google would pretty much have to start bleeding money to trade as low you're suggesting is inevitable.
  - systems 18y ago
    why are you happy for buying google at $349, you bought at a high price, the price dropped ~ $10, you lost $10 a share ... what is happy about this story! really i want to understand your point of view
    - alaskamiller 18y ago
      because it's a $500 stock and when it bounces back he'll be doing pretty good?
    - SwellJoe 18y ago
      why are you happy for buying google at $349, you bought at a high price, the price dropped ~ $10, you lost $10 a share ... what is happy about this story! Obviously, because I've wanted to buy some GOOG for a while now, and it's been way too expensive. Maybe it was still a few bucks too expensive and my enthusiasm for the company blinded me to the still dropping state of the market...but I think Google is one of the best companies in the world, and it's currently trading at a fair price. If I believe that Google is going to weather the economic storm better than the average company (I do), and I believe that rapid inflation is going to insure that any money that I keep in cash is going to decline in value (I do), and I believe that Google revenue is going to grow faster than the returns from a CD (I do), and that when the market comes to its senses in a month or two or three it'll realize that GOOG is one of the best companies in the world and worth more than 22 times earnings, particularly given the huge stockpile of cash Google is holding (I do), then I don't feel too bad about missing the bottom by a few percentage points. And it's only 12 shares (so, $120 on a $4400 holding). And, like I said, if it keeps going down, I'll try to spot the bottom, or maybe wait until it actually starts a steady climb, and buy a few more shares. really i want to understand your point of view Do you understand it now? Basically, I just view it as a chance to own shares in a great international company at a dramatic discount off of recent valuations. It's not a "bargain" stock, even now, but that's because it is a stronger company than most of the stocks that were hit as hard. Yahoo has been hit far harder, but they're obviously not as good a company--though I think they're being maligned unfairly. They're still a great media company...they just have some problems making money. But I think Yahoo probably is a great buy right now.
      - kirse 18y ago
        Do you really believe that a company that makes the majority of its income from advertising will hold its value through one of the worst recessions were facing in a long time? There's going to be some major spending cutbacks across the board over the next couple years because there HAS to be (from people to business to government), and advertising/marketing is going to be at the top of the list. There is a fundamental shift in the economy right now - credit is drying up and people are going into conserve and save mode. There's no way in hell Google will have a $15 EPS two years from now, you can put this post in your calendar for October 2010. So yes, when Google's EPS is something like $1.50, it will make a ton of sense when they're trading at $40-50. Unless they've got some mysterious source of income, advertising is going to suffer horribly in this recession and so will the companies that depend on it.
iamelgringo 18y ago
I don't know. The hackers that I've recently talked to that work at Yahoo seem pretty happy with the place. There might be more pink slips and cost cutting in the future. But they are coming out with some pretty cool open source technology and getting some decent street cred with developers: Hadoop, YUI, BOSS, Web analytics. They're seen as "getting" open source in the developer community. Maybe it's too late for them, but I have the feeling that the hackers as Yahoo, under Jerry Yang are going to start putting out cool new products again, and eventually the stock price is going to reflect that.
- davidw 18y ago
  You're completely right about the cool open source stuff. How do they connect that with making money, though?
  - helveticaman 18y ago
    With the original CEO at the helm, they might have the same success Apple had.
- ScottWhigham 18y ago
  I don't know. The hackers that I've recently talked to that work at Yahoo seem pretty happy with the place. If the stock drops another 50% in the next six months like it did over the previous six months, I'm pretty sure those hackers won't be happy nor will they likely be working there.
  - maxklein 18y ago
    What does stock value have to do with company profits or income? Why would a profitable company fire employees because it's stock value is low? Do you actually understand the concept of stock and what is happening when people trade stock on the market?
    - iamdave 18y ago
      What Stock values tell you how much your company is worth. Company worth tells you how likely you are to get people to invest in you. Stock value is very relevant, though I personally hate the way we go about depending on it as a performance metric, which I think is how you're looking at it. Stocks are reflective of performance, rarely (if not) the other way around. Doesn't mean it never happens that way, although.
cbrinker 18y ago
Wow? Seen Bear Stearns lately?
SwellJoe 18y ago
I see prices like that for the most popular website on the Internet, and I'm sad that I don't have any more cash in my trading account. (I already bought GOOG with all that I had handy.)
maxklein 18y ago
Seriously, is Michael Arrington being paid to trash Yahoo? Yahoo stock price may be low, but how does that affect the company itself? TechCrunch posts news like it's trying to force Yahoo to collapse. And seriously who wants a Microsoft Yahoo merger apart from Michael Arrington? Should so much power be concentrated? It's STOCK! The company already made the money from the stock sale, whatever price outside traders want to bet on is not relevant. I think I'll be buying some Yahoo stock actually.
- TweedHeads 18y ago
  He lost all credibility long time ago.
- utnick 18y ago
  Well I would assume it affects the company because employees have no reason to stay until their stock options vest because their options are worthless now. Also, the executives of a company care about the stock price, because if it goes too low, the investors will call for their heads. This pressure can make the executives do things like reduce expenditures and headcounts.
timtrueman 18y ago
What about Yahoo!'s stake in Alibaba and Yahoo! Japan?
rgrieselhuber 18y ago
And yet their P/E is still at 19. If Yahoo really sucked that bad, wouldn't they be cheaper?
- Prrometheus 18y ago
  They can always increase that ratio by lowering their earnings.

LPTS 18y ago

Maybe Jerry Yang should give Steve Ballmer a call and see if he's still game to buy Yahoo at 43 a share (or whatever it was).

kirse 18y ago

I hate how TechCrunch seems to idolize Google stock, as if its not going to be hovering at around $40-$50 in the next 18-24 months. The market in general is going to be coughing up some blood for awhile, and I'm going to bookmark this post and send it to Mr. Arrington when I'm proven right. I remember owning Yahoo at $300+ (which split) back during its high-flying days, and Google will be no different with its heavy reliance on advertising for revenue.

SwellJoe 18y ago
I'm curious why you believe GOOG will be trading at around 3 times earnings? That just doesn't even make sense to me, and I'm having a hard time imagining anything short of total economic collapse that could lead to such an unlikely scenario. While GOOG may not be bottomed out at ~$340 (I bought a few shares at $349, and am pretty happy with the price...and if it keeps dropping, I'll buy more, once it starts climbing again), I just don't see how you can possibly imagine it's a $40-$50 stock. Terrible companies trade at better than three times earnings, average companies trade at 10 times earning, and I don't think anyone is going to accuse Google of being a terrible, or even an average company. Google would pretty much have to start bleeding money to trade as low you're suggesting is inevitable.
- systems 18y ago
  why are you happy for buying google at $349, you bought at a high price, the price dropped ~ $10, you lost $10 a share ... what is happy about this story! really i want to understand your point of view
  - alaskamiller 18y ago
    because it's a $500 stock and when it bounces back he'll be doing pretty good?
  - SwellJoe 18y ago
    why are you happy for buying google at $349, you bought at a high price, the price dropped ~ $10, you lost $10 a share ... what is happy about this story! Obviously, because I've wanted to buy some GOOG for a while now, and it's been way too expensive. Maybe it was still a few bucks too expensive and my enthusiasm for the company blinded me to the still dropping state of the market...but I think Google is one of the best companies in the world, and it's currently trading at a fair price. If I believe that Google is going to weather the economic storm better than the average company (I do), and I believe that rapid inflation is going to insure that any money that I keep in cash is going to decline in value (I do), and I believe that Google revenue is going to grow faster than the returns from a CD (I do), and that when the market comes to its senses in a month or two or three it'll realize that GOOG is one of the best companies in the world and worth more than 22 times earnings, particularly given the huge stockpile of cash Google is holding (I do), then I don't feel too bad about missing the bottom by a few percentage points. And it's only 12 shares (so, $120 on a $4400 holding). And, like I said, if it keeps going down, I'll try to spot the bottom, or maybe wait until it actually starts a steady climb, and buy a few more shares. really i want to understand your point of view Do you understand it now? Basically, I just view it as a chance to own shares in a great international company at a dramatic discount off of recent valuations. It's not a "bargain" stock, even now, but that's because it is a stronger company than most of the stocks that were hit as hard. Yahoo has been hit far harder, but they're obviously not as good a company--though I think they're being maligned unfairly. They're still a great media company...they just have some problems making money. But I think Yahoo probably is a great buy right now.
    - kirse 18y ago
      Do you really believe that a company that makes the majority of its income from advertising will hold its value through one of the worst recessions were facing in a long time? There's going to be some major spending cutbacks across the board over the next couple years because there HAS to be (from people to business to government), and advertising/marketing is going to be at the top of the list. There is a fundamental shift in the economy right now - credit is drying up and people are going into conserve and save mode. There's no way in hell Google will have a $15 EPS two years from now, you can put this post in your calendar for October 2010. So yes, when Google's EPS is something like $1.50, it will make a ton of sense when they're trading at $40-50. Unless they've got some mysterious source of income, advertising is going to suffer horribly in this recession and so will the companies that depend on it.

iamelgringo 18y ago

I don't know. The hackers that I've recently talked to that work at Yahoo seem pretty happy with the place. There might be more pink slips and cost cutting in the future. But they are coming out with some pretty cool open source technology and getting some decent street cred with developers: Hadoop, YUI, BOSS, Web analytics. They're seen as "getting" open source in the developer community. Maybe it's too late for them, but I have the feeling that the hackers as Yahoo, under Jerry Yang are going to start putting out cool new products again, and eventually the stock price is going to reflect that.

davidw 18y ago
You're completely right about the cool open source stuff. How do they connect that with making money, though?
- helveticaman 18y ago
  With the original CEO at the helm, they might have the same success Apple had.
ScottWhigham 18y ago
I don't know. The hackers that I've recently talked to that work at Yahoo seem pretty happy with the place. If the stock drops another 50% in the next six months like it did over the previous six months, I'm pretty sure those hackers won't be happy nor will they likely be working there.
- maxklein 18y ago
  What does stock value have to do with company profits or income? Why would a profitable company fire employees because it's stock value is low? Do you actually understand the concept of stock and what is happening when people trade stock on the market?
  - iamdave 18y ago
    What Stock values tell you how much your company is worth. Company worth tells you how likely you are to get people to invest in you. Stock value is very relevant, though I personally hate the way we go about depending on it as a performance metric, which I think is how you're looking at it. Stocks are reflective of performance, rarely (if not) the other way around. Doesn't mean it never happens that way, although.

cbrinker 18y ago

Wow? Seen Bear Stearns lately?

SwellJoe 18y ago

I see prices like that for the most popular website on the Internet, and I'm sad that I don't have any more cash in my trading account. (I already bought GOOG with all that I had handy.)

maxklein 18y ago

Seriously, is Michael Arrington being paid to trash Yahoo? Yahoo stock price may be low, but how does that affect the company itself? TechCrunch posts news like it's trying to force Yahoo to collapse. And seriously who wants a Microsoft Yahoo merger apart from Michael Arrington? Should so much power be concentrated? It's STOCK! The company already made the money from the stock sale, whatever price outside traders want to bet on is not relevant. I think I'll be buying some Yahoo stock actually.

TweedHeads 18y ago
He lost all credibility long time ago.
utnick 18y ago
Well I would assume it affects the company because employees have no reason to stay until their stock options vest because their options are worthless now. Also, the executives of a company care about the stock price, because if it goes too low, the investors will call for their heads. This pressure can make the executives do things like reduce expenditures and headcounts.

timtrueman 18y ago

What about Yahoo!'s stake in Alibaba and Yahoo! Japan?

rgrieselhuber 18y ago

And yet their P/E is still at 19. If Yahoo really sucked that bad, wouldn't they be cheaper?

Prrometheus 18y ago
They can always increase that ratio by lowering their earnings.