Yahoo Cuts off its Wang

I’ve never understood the market’s love affair with Yahoo (YHOO). While the stock was around $30, I said that it should be half that much. At one point last week, the shares fell below $10—and that’s still too high. I’ll give them credit for making money, but they don’t make too much. Earnings-per-share will probably drop for the third straight year.
After a little over a year running things, Jerry Yang is leaving the CEO slot. It’s about time. This guy really had no idea what he was doing. Not surprisingly, the stock is up strongly today. That’s got to be embarrassing.
In February, Microsoft offered to buy Yahoo for $31 a share, which was a 62% premium over its price. In one the classic business blunders of all time, Yahoo said no, they wanted $37. Microsoft went up to $33. Again, Yahoo said no, they wanted $37. Then Microsoft said forget about it. Forget $33. Forget $31. Forget it all. Once Yahoo’s stock started plunge, Yang said, “hey, you can still buy us!”
If you want to more why Yahoo is in such a bad place, you can Google the details.

Posted by Eddy Elfenbein on November 18th, 2008 at 11:17 am

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