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Yahoo! Inc. (YHOO) Message Board

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  • yinvestor yinvestor Oct 28, 2011 4:21 PM Flag

    Options Strategy

    If you could ensure that you could make money by that way then it's a miracle.
    Good luck!

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    • Buying puts or writing calls is a type of insurance, the problem develops if YHOO just trades in a narrow range like it's doing now. If this continues, we are F_______.

      • 1 Reply to chaolopez
      • If you think the stock is going to trade in a narrow range for some time, until this mess is sorted out, you may as well put your money into the bank and jump in later. You will pay less in premiums across the board. Otherwise trade to take advantage of the narrow range.

        If you think it's going to make a move in the short term you should buy for the short term.

        I think you will be fortunate if this is settled by January. If something doesn't happen in the next 6 weeks, then it's all over until next year, and it won't likely happen in January.

        There is no indication that any potential bidder is anywhere near ready to make any move yet, and as you may notice, things are very complicated. Logistically there are great problems in collecting the players together in December. Once things get rolling again, assuming they are rolling now, you have a few weeks to get everyone up to speed and make sure that there is a plan in place to deal with all the elements of a buyout, including taxes for a new season.

        At any time, multiple factors, such as a participant removing themselves, the economic climate, and even a horrible Q4 earnings report for example, could result in further delays.

        Time is not of the essence here and Jerry Yang and his handpicked BOD are not in any hurry. You can rest assured that they want to try out a new CEO and see if they can right the ship.

        If the Asian assets are traded for cash, the share price will not move upward except as a quick pop and drop, since the current value of those assets is baked in now, and what remains behind as Yahoo! is an unsustainable business in its current form.

        So I wouldn't do what you are doing, but I don't have any special insight, and if you are comfortable with your strategy, that is the most important thing. Good luck.

 
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