So you are saying there is lots of business that can move to HP-Arista. did you notice Chambers sold 85$ million of his stock before he put in a new CEO. Not exactly a vote of confidence. Networking is changing and Cisco is the old dog struggling to do new tricks.
Cisco is in turmoil. Existing leaders are being dumped, big lay offs coming and they are forcing folks to change out the network to get to next gen, which opens the door for Arista and others. HP selling Arista is bad news for Cisco. And customers want Arista to work similar to Cisco, so they don't have to retrain. So if Cisco thumps Arista, they will upset lots of customers and probably lose even more business.
So September is not far away. What do you think the problem is? Could it be that Marissa is too busy counting her 42M$ pay, which appears to be completely a result of her predecessors savvy business investments.
I believe Yahoo has additional value, but it does not appear the stock market feels the same as yahoo's market cap is currently their Baba stock plus cash on hand.
Since almost all of Yahoo's value is their Baba stock, doesn't Baba sort of already own Yahoo in a round about way. It seems more likely to me that they would do some kind of a merger and Yahoo stock would get converted to Baba stock with much of it coming from Yahoo's existing 380 million Baba shares. Spinco is confusing. And Baba buying Yahoo, whose value is almost completely Baba stock is confusing, as Baba doesn't really need more Baba stock, granted it would prevent dilution in September. And since Yahoo doesn't seem to have any value without Baba, they might as well become part of Baba.
So doesn't this mean that yahoo is ridiculously under priced? As just the baba share justfies the current 43$ per share price, so Yahoo stock is currently valued at 0.
Well I've been investigating more about Spinco and it's really quite confusing as to what Yahoo becomes. It appears for about every 3 shares of Yahoo, you get 1 share of Spinco. And it would seem you can sell your Spinco share and not pay any taxes. It would be like an ETF, except it only has 1 stock, Baba so should sell for the price of Baba. The real concern here is what happens to the price of Yahoo when this happens. And since it's really just trading in Baba shares, doesn't creating 380 million shares of spinco have the same effect on Baba as 380 million new shares of baba being for sale?
I'm not short and recently bought Yahoo. I bought Yahoo because the Baba wild ups and downs are too scary. However, people suggesting these folks won't sell is silly. If yahoo just plans to sit on their Baba shares, then who cares what the IRS thinks as they aren't selling anyhow. And if the IRS rules change, Yahoo will dump everything to beat the change.
You folks are hilarious. Why do you think they will not sell, because the CEO said so. If I had a dollar for every time I heard a CEO lie, I would not have to trade stocks. Their job is to spin and control. If someone said they aren't selling, odds are very good they will do some selling, they just don't want anyone to know between now and then. Then when they start selling, they will tell you that circumstances have changed! Learn to think for yourself! What possible purpose would all this money serve for Yahoo just sitting there? Unless Baba starts doing dividends, this would seem pretty dumb.
Clearly you don't monitor BABA very closely. Most BABA trading days start with a big red sell spike with someone selling 1M shares, then a few more big spikes follow throughout the day. Many are trying to cash out, but they are trying to do so without too much adverse effect on the stock price. I'd guess Yahoo will initially liquidate 30-50% to reduce their exposure to risks and to have some flexibility. And with the noise the IRS is making, they may sell it all to avoid future IRS changes.
Having listed to the call I agree with you that they sounded more like techies than business people. When you scale the business sometimes players to change and you need someone who can sell the investors and build confidence. While they are honest and conservative, I'd think a warrior mentality that we are going to win the data center could have pushed the stock up 10%.
From listening to the call my sense is that the CEO is more of a techie person that a business person. As CEO you need to speak finance and sell confidence, versus tech talk which investors may not understand. Some clear statements about big customer wins could have gone a long way, but maybe they are afraid to upset Cisco too much. Since Cisco is forcing total equipment trade outs to ACI, Arista has lots of opportunity, to but this was not clearly expressed. Maybe she would be better as COO.
There are many people short the stock and the spin is probably to keep them from loosing too much. Time to cover. If I was going to short something it would be Cisco as they are looking too big, old and slow.