Archive for February 9th, 2008
Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
The New York Times reports that the board of Yahoo! Inc. (NASDAQ: YHOO) has rejected Microsoft Corp.’s (NASDAQ: MSFT) $44.6 billion takeover bid. Does Yahoo have a bigger bid in the wings? No, of course not. It’s trying to use a shaky legal argument — that the deal — which was nearly double Yahoo!’s pre-deal value — severely undervalues Yahoo!
If Yahoo! has so many wonderful ways to increase its shareholder value, why are they not reflected in its stock price? Meanwhile, the best short-term money making idea would be to boost Yahoo!’s revenue and profit by outsourcing its search-related ad business to Google Inc. (NASDAQ: GOOG), because Google’s advertising technology generates far more cash for every search query, on average.
But Yahoo! has resisted this move because it invested in Panama, which was intended to compete with Google. For Yahoo! executives, replacing Panama, or other parts of its search system, with Google’s technology would be an admission of defeat.
If this is the best that Yahoo! can do to respond to Microsoft’s bid, I think shareholders better hope that Microsoft doesn’t decide to just walk away. If it thinks that this head fake will get Microsoft to raise its bid, then maybe it makes sense.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
Permalink | Email this | Linking Blogs | Comments
Share This
 No Comments »
Filed under: Earnings reports, PepsiCo (PEP), Toyota Motor Corp. (TM), Archer-Daniels-Midland (ADM), Chevron Corp (CVX), Yum Brands (YUM), Wendy’s Intl (WEN), News Corp’B’ (NWS), Alcatel-LucentADS (ALU), Toll Brothers (TOL), Western Union (WU), Polo Ralph Lauren’A’ (RL)
The earnings crunch continues, and here are a few of the highlights of this past week’s earnings coverage from BloggingStocks:
Continue reading Earnings highlights: PepsiCo, Toyota, News Corp., ADM, Toll Bros. and others
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
The New York Times reports that the board of Yahoo! Inc. (NASDAQ: YHOO) has rejected Microsoft Corp.’s (NASDAQ: MSFT) $44.6 billion takeover bid. Does Yahoo have a bigger bid in the wings? No, of course not. It’s trying to use a shaky legal argument — that the deal — which was nearly double Yahoo!’s pre-deal value — severely undervalues Yahoo!
If Yahoo! has so many wonderful ways to increase its shareholder value, why are they not reflected in its stock price? Meanwhile, the best short-term money making idea would be to boost Yahoo!’s revenue and profit by outsourcing its search-related ad business to Google Inc. (NASDAQ: GOOG), because Google’s advertising technology generates far more cash for every search query, on average.
But Yahoo! has resisted this move because it invested in Panama, which was intended to compete with Google. For Yahoo! executives, replacing Panama, or other parts of its search system, with Google’s technology would be an admission of defeat.
If this is the best that Yahoo! can do to respond to Microsoft’s bid, I think shareholders better hope that Microsoft doesn’t decide to just walk away. If it thinks that this head fake will get Microsoft to raise its bid, then maybe it makes sense.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Internet, Videos
OK, so I lied about it. To my knowledge, Billy Joel hasn’t yet opined on the subprime mess. But we’ll keep you posted if he does.
Instead, a hilarious riff on Joel’s hit “We didn’t start the fire” is making the rounds on the internet — It’s definitely not as good as Merle Hazard’s “hit” “H-E-D-G-E F-U-N-D” but it’s pretty good.
I wonder whether YouTube videos featuring market-oriented gallows humor could be seen as a sign of a bottom — a sign that the traders/managers making these videos have finally gone nuts.
In case you missed out on Hazard’s follow-up, check out “In the Hamptons.”
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Exxon Mobil (XOM), Venezuela, ConocoPhillips (COP), Politics, Oil
 You may file this under: It’s about time.
I’ve been patiently waiting for something to be done regarding the seizure of Venezuelan oil infrastructure by communist dictator Hugo Chavez. It appears that time has come, with the help of Exxon Mobil Corp. (NYSE: XOM). As reported by Reuters, approximately $12 billion in Venezuelan assets have been frozen. It’s just too bad that John F. Kennedy isn’t still around. He’d have already parked an armada of gunboats a mile off the sunny shores of Venezuela. There’s a limit to the amount of guff we should take from an out-of-control communist dictator.
Continue reading Exxon puts the smack-down on Hugo Chavez: Court freezes Venezuelan assets
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Deals, Microsoft (MSFT), Yahoo! (YHOO), Merrill Lynch (MER)
The board at Yahoo! (NASDAQ: YHOO) will turn down a bid from Microsoft (NASDAQ: MSFT) which is valued at $31 a share. According to The Wall Street Journal (subscription required), Yahoo!’s board determined that the $31 per share offer “massively undervalues.”
Rumors are that Yahoo! will seek an amount of at least $40 a share.
Douglas A. McIntyre is an editor at 247wallst.com.
Read | Permalink | Email this | Comments
Share This
No Comments »
Filed under: Rants and raves, Delta Air Lines (DAL)
With the news of impending M&A in the airline industry, based on my flight yesterday with Delta Air Lines Inc. (NYSE: DAL), the merger should be with Yellow Cab.
I was on a flight from JFK to Seattle, and the plane had finished boarding 10 minutes prior to takeoff when a flight attendant got on the PA system and thanked everyone for boarding so quickly but said they would have a delay anyway since the pilots had yet to arrive to the plane. Well to make a long story short we took off an hour late because the pilots, who were staying at a hotel in midtown Manhattan, weren’t picked up by Delta transportation, and then when finally picked up they hit traffic and came really late.
Forget about merging with another carrier. How about buying a cab company so that you can get your pilot’s to the plane on time?
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer has no positions in any stock mentioned as of 2/8/08.
Read | Permalink | Email this | Comments
Share This
No Comments »
Filed under: Insiders, Industry
When things are going well, the government seems to leave well enough alone. But, after credit ratings operations like S&P and Fitch missed the mark badly on their analysis of subprime financial instruments, the SEC may want a hand in how the firms function.
As the heart program being reviewed by the SEC is a plan to grade past ratings from the credit agencies to see whether they were accurate. Call it a report card. According to The Wall Street Journal (subscription required), SEC Chairman Christopher Cox said the potential rules “would require credit-rating agencies to make disclosures surrounding past ratings in a format that would improve the comparability of track records and promote competitive assessments of the accuracy of past ratings.”
Getting all of the data about how the companies grade securities and comparing past ratings to how securities actually performed is an excellent idea. It is not unlike looking at how a securities analyst has done with his or her ratings of stocks.
The problem with the credit ratings agency program now is that it has no basis in accountability. Changing that is the key to improvement.
Douglas A. McIntyre is an editor at 247wallst.com.
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Comfort Zone Investing
 Ted Allrich is the founder of The Online Investor and author of the just released book: Comfort Zone Investing: Build Wealth And Sleep Well At Night. In this weekly column, he’ll offer advice to investors who are just getting started.
You may not know the term “sector rotation”. It’s used by investors to get a read on the market. It’s not hard to understand, just a new phrase for many investors to learn. Here’s what it means.
Sector rotation is when investors sell certain industry stocks and buy other industry stocks. What really matters is what they’re selling and what they’re buying. For example, when investors sell consumer durables and drug stocks and start buying tech stocks, it means they’re bullish on the economy. If they’re buying financials and housing stocks, they’re also taking a positive stand. That’s because housing and financials are some of the early beneficiairies of an economic recovery. They’re the stocks that earn profits sooner than later as people borrow more money (helping the banks) and buying houses.
Continue reading Comfort Zone Investing: Sector rotation: sellling some, buying others
Permalink | Email this | Comments
Share This
No Comments »
Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
Yahoo! Inc.’s (NASDAQ: YHOO) board met Friday to discuss a buy-out bid from Microsoft Corp. (NASDAQ: MSFT). No news was issued by the company, but several media outlets reported that the group discussed licensing its search rights to Google Inc. (NASDAQ: GOOG) for a high sum or trying to get a better bid from Microsoft
Yahoo!’s board can grow old waiting for a bump up in that offer. The Wall Street Journal wrote, referring to the Google option (subscription required), that “such a deal could increase Yahoo’s cash flow and give it more latitude to try to thwart the Microsoft approach.” While the deal might bring in more money and allow Yahoo! to fire much of its R&D staff, there is no guarantee that it will keep the firm’s stock north of $30. Except for periods when there were rumors of a buy-out, shares have traded in the $20s and were below $20 slightly before the bid from Redmond.
Steve Ballmer knows all of this.
It’s time or Yahoo! to admit that its business has faltered badly and probably cannot recover. It could always out-sourced its search business to Google. It clearly never thought the idea was good enough.
And, regulators are not going to like the idea of the No.1 and No. 2 search companies teaming up.
Douglas A. McIntyre is an editor at 247wallst.com.
Permalink | Email this | Comments
Share This
No Comments »
|
