Facebook Or Yahoo: Which One Gets Back To $38 First?
Both Facebook and Yahoo are turnarounds.
So, which company will be first to get back to the share price of $38?
My bet is on Yahoo – literally. I am a Yahoo shareholder.
On September 18th, Yahoo turned deferred cash into cash when it closed a deal with Alibaba, the Chinese Internet company. Yahoo had 40 percent stake in the company and Alibaba repurchased half of it back. In the deal, Yahoo received approximately $7.6 billion — $6.3 billion in cash and $800 million in preferred shares of Alibaba, as well as $550 million under a revised licensing agreement.
In addition, Yahoo owns a 35 percent equity stake in Yahoo Japan (YAHOF.PK), a public company that was formed in 1996 by Yahoo and Softbank. As of October 23, 2012 Yahoo's stake in Yahoo Japan was valued at $7.5 billion (before taxes). It was reported in January 2012 that Yahoo wished to sell its stake.
Altogether, Yahoo’s cash equivalent holdings total $13 billion with about 1.18 billion outstanding shares. Cash per share is $11. Doing the math, at a share price of $16.84 (as of market close 10/31/12), that’s how I arrived at 65.4 percent as the amount of its share price backed up by cash.
Yahoo's value in cash is more than 22 billion if you value Alibaba at 30 billion. The price of this company makes no sense. Why Yahoo is not $25+ is very confusing to me. I would expect a "player" to make a bid for Yahoo at $35 to $40 pps. This whole Yahoo thing has been very confusing for me for a long time. Could it be the pathetic management they had made that much of a negative affect? Wow! Lots of confidence from the street on the current management. You really have to believe when they dumb Japan and Alibaba ipo's or at least announces their ipo date Yahoo will sore over $30. jmho
Not many players out there than can afford Yahoo. Microsoft may try it again with the current management. Facebook is so unpredictable with their very strange ceo and Apple is to quite about anything they may do about anything.