As millions of Institutional Investors read my blog and seek my advice regarding tech sector investments, I have decided to salt Fred's comments with some unsolicited moral porridge, something that shall stick to the ribs of investors and not run off, as tech news is want to do.
Investors! Heed me! Hold off on the Yahoo call. Yahoo's wise, though beardless founder, has made a decision that is in the best interest of the industry at large, in the long term.
Yahoo is being helmed back to its center; back to the days when lasting architectural foundations of internet systems were made to last and deliver value for more than one trading cycle, more than one quarter's report.
The merger would have been a drawn out fiasco, and resulted in naught. The new fear of G-d that is Yahoo's sweaty legacy of this non-deal, is that the preeminent engineers and smart y pants people that built the Yahoo legacy, are for a moment, back in the driver's seat.
You, shareholder, may be currently dismayed. But what is being built under your arses is nothing short of a next generation platform for network computing and user centered, (social hate that word) networking. The type of cloud that Yahoo is moving to build and the services thereof will last much longer, nay shall endure, far better than the plethora of here and gone social me too crapola from the valley.
What the Yahoo! has done is tantamount to changing the plating of the Titanic's deck, not the chairs - the turbines, not the band. The officer of the watch saw the iceberg in time, barely. The Andrea Dorea turned and narrowly scraped the Stockholm.
All Success, Cap'n Jerry, aye me boy, aye. All buy Yahoo on the down and show yer support for our stalwart Valley institutions.
Matt Harwood
· 1 year ago
Very much of the same opinion here, Fred. Though I'm far from a financial whizz, I think Microsoft's attitude to the entire affair right from the get-go may help traders look more in favor of the outcome. I'm off to vote in your poll..
mickwe
· 1 year ago
Hi Fred, I put the poll on our homepage - should bring a lot more votes: http://seekingalpha.com/
Great idea, thanks!
JC
· 1 year ago
You shouldn't represent this distribution graph as a line chart. Its misleading and implies relationship (trend) between the data points which there isn't one since your X-axis is not time or other relative scale. This should be a bar chart (histogram) since you're representing volume in each bucket.
DonRyan
· 1 year ago
I'd consider buying but certainly not at the open. It's going to be an ugly day for YHOO.
Seth
· 1 year ago
Concur with FW, still long on yahoo in the low 20's.
Kyle S
· 1 year ago
It's trading in the high 22s pre-market as I type this (9am EST Monday). Looks like you'll be able to buy some if you want, Fred.
fredwilson
· 1 year ago
I've got a limit order in at $22
kevinfrey
· 1 year ago
I love the irrationality after events like this. Prime time to capitalize if you a bullish on the company.
ErikSchwartz
· 1 year ago
I have no idea where Y! will end up today.
I do think it's best for both parties that this deal doesn't happen. Y! was undervalued. MSFT could not fix what ails Y!. Y! would never integrate well with MSFT.
What Y! needs to do now is execute like mad. They need to start thinking like a start up again. They need to fire the office politicians. They need to get the product cycle down to weeks not months and years. They need to let people take risks and launch things that might fail. Failing is not bad if your product cycle is short. Failing is catastrophic if your product cycle is a year or more.
Disclosure: I was employee #203 (or therabouts) at Y!. I am still a minor Y! shareholder. I also hold a position in MSFT.
donpark
· 1 year ago
Since we are in guessing mood...I think YHOO will range $20~25 and close around $23. After market closes, Yang and Filo will announce personal buyback (10% sounds reasonable) and YHOO will open tomorrow at $25 then slide back to show how much market really cares about YHOO.
bernard lunn
· 1 year ago
I have no idea what Mr. Market will do, but occasionally I dabble in undervalued tech stocks where I think I may know more than the crowd. Usually the smaller ones where fewer analysts are poking around. (Wonderful opportunities around 2002, few since then). My starting point is PEG (Price Earnings Growth) ratio. I like to find stocks below 1and then make my own judgment on next 5 years earnings. On PEG, Yahoo looks overvalued compared to the other Gorillas (from Yahoo Finance Statistics):
Yahoo = 2.92 Microsoft = 1.21 Google = 1.02 Amazon = 2.27 eBay = 1.02
Falling price does not equal value.
djc8080
· 1 year ago
Your 16x assumes expected growth to maintain global share. Yahoo is losing search, email, news, and ad share. 10x assumes growth better than the economy. If ebitda growth becomes negative, then 6x would be more reasonable.
Is $32 realizable? Is $23 sustainable? It depends on Yahoo's execution moving forward.
pierreloic
· 1 year ago
Actually the option missing in the poll for me is "does it matter?".
By resisting Microsoft's bid, Yahoo! is betting on long term value creation over than short term profit for its shareholders. I don't think that YHOO today's price has much meaning at all. The combination of opportunistic investment being withdrawn and some angry shareholders would explain a steep plunge by YHOO in the days to come without holding much meaning on the soundness of the bet the company are taking.
Kudos to the management at Yahoo! who have shown some true leadership. The company now needs to live up to their promises.
vruz
· 1 year ago
I voted $24 the other day, like many others did. As of 15:50 EST it looks like it's possible YHOO will stabilise at a number not too far from that. I'm a geek/artist/entrepreneur/technologist, definitely not trained in the avatars of the stock market. The astonishing thing to me is not the numbers, but how clueless so many financial analysts are about this business, or -failing that- how incredibly shortsighted, and irrationally biased some of them can be.
fredwilson
· 1 year ago
I wasa a little too optimistic with 26 but I've been rooting for yhoo all along and I guess I showed that
I had a limit order in at 22 all day and it never got filled. I wonder what says about me if I thought 26 was fair value
Fred
vruz
· 1 year ago
You did better than Forbes and many others who are calling Yahoo a loser. In my case it's easier said than done, I'm not betting my own money, it's hard to say whether my criteria would have been the same betting my own money.
The clear thing to me is the analysto-journalists don't know shit. I've seen this before working for Groklaw, when everybody said we were toasted, and you know how we came out of it with flying colours.
*shaking head in disbelief*
vruz
· 1 year ago
Next poll:
How long until Ballmer gets fired ?
I hear some uncorking is taking place at Yang's and Decker's.
All Comments
Investors! Heed me! Hold off on the Yahoo call. Yahoo's wise, though beardless founder, has made a decision that is in the best interest of the industry at large, in the long term.
Yahoo is being helmed back to its center; back to the days when lasting architectural foundations of internet systems were made to last and deliver value for more than one trading cycle, more than one quarter's report.
The merger would have been a drawn out fiasco, and resulted in naught. The new fear of G-d that is Yahoo's sweaty legacy of this non-deal, is that the preeminent engineers and smart y pants people that built the Yahoo legacy, are for a moment, back in the driver's seat.
You, shareholder, may be currently dismayed. But what is being built under your arses is nothing short of a next generation platform for network computing and user centered, (social hate that word) networking. The type of cloud that Yahoo is moving to build and the services thereof will last much longer, nay shall endure, far better than the plethora of here and gone social me too crapola from the valley.
What the Yahoo! has done is tantamount to changing the plating of the Titanic's deck, not the chairs - the turbines, not the band. The officer of the watch saw the iceberg in time, barely. The Andrea Dorea turned and narrowly scraped the Stockholm.
All Success, Cap'n Jerry, aye me boy, aye. All buy Yahoo on the down and show yer support for our stalwart Valley institutions.
http://seekingalpha.com/
Great idea, thanks!
I do think it's best for both parties that this deal doesn't happen. Y! was undervalued. MSFT could not fix what ails Y!. Y! would never integrate well with MSFT.
What Y! needs to do now is execute like mad. They need to start thinking like a start up again. They need to fire the office politicians. They need to get the product cycle down to weeks not months and years. They need to let people take risks and launch things that might fail. Failing is not bad if your product cycle is short. Failing is catastrophic if your product cycle is a year or more.
Disclosure: I was employee #203 (or therabouts) at Y!. I am still a minor Y! shareholder. I also hold a position in MSFT.
Yahoo = 2.92
Microsoft = 1.21
Google = 1.02
Amazon = 2.27
eBay = 1.02
Falling price does not equal value.
Is $32 realizable? Is $23 sustainable? It depends on Yahoo's execution moving forward.
By resisting Microsoft's bid, Yahoo! is betting on long term value creation over than short term profit for its shareholders. I don't think that YHOO today's price has much meaning at all. The combination of opportunistic investment being withdrawn and some angry shareholders would explain a steep plunge by YHOO in the days to come without holding much meaning on the soundness of the bet the company are taking.
Kudos to the management at Yahoo! who have shown some true leadership. The company now needs to live up to their promises.
I'm a geek/artist/entrepreneur/technologist, definitely not trained in the avatars of the stock market.
The astonishing thing to me is not the numbers, but how clueless so many financial analysts are about this business, or -failing that- how incredibly shortsighted, and irrationally biased some of them can be.
I had a limit order in at 22 all day and it never got filled. I wonder what says about me if I thought 26 was fair value
Fred
In my case it's easier said than done, I'm not betting my own money, it's hard to say whether my criteria would have been the same betting my own money.
http://vruz.tumblr.com/post/33822061
The clear thing to me is the analysto-journalists don't know shit.
I've seen this before working for Groklaw, when everybody said we were toasted, and you know how we came out of it with flying colours.
*shaking head in disbelief*
How long until Ballmer gets fired ?
I hear some uncorking is taking place at Yang's and Decker's.