The Yahoo Trainwreck

I guess the upside is that a stock can’t fall below zero, so there’s an end in sight to the ongoing destruction of jobs and shareholder wealth at Yahoo (YHOO). The stock closed at $13.76 Wednesday, down another 5.6%. And this isn’t just part of the market’s overall meltdown - the Nasdaq fell just 0.8% Wednesday, and Google (GOOG), Yahoo’s main direct competitor, was down just 2.3%.

At this point I’ve moved beyond wondering how Yahoo’s senior management manages to keep themselves in power. The private equity funds who agreed to let Yang and Decker stay in power after the shareholder vote last summer have some real explaining to do to their investors, too.

Yahoo has no game plan, and the markets tend to notice these things. It’s time for an intervention.

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Comments

[southbeach:]

Yep, Yang and Yahoo sure showed Microsoft a thing or two. Perhaps a new word is warranted in investor lexicon for rich takeovers scuppered 'on principle'. The deal has been "Yanged" - meaning, shareholder value has been flushed down the toilet because the acquiring company wasn't 'cool' enough. In a horrible way, its fascinating to watch this stock. If and when will it fall below $10...? I'm sure Bill Miller is wishing he'd understood the stubbornness and strategic myopia of Y! before he plunked down his investors hard earned bucks on this veritable Web 1.0 citrus fruit.

2008 Oct 09 07:55 AM

[markdauvid:]

yahoo had their chance with microsoft to make a real nice but jerry ying-yang decided yahoo was worth much more when actually it was a toss up as to what was more inflated, yahoo stock prices or his ego. i wouldn't be a bit surprised if microsoft isn't waiting to buy yahoo at a fire sale price. it's too bad really because i like yahoo and now yahoo stock is in the dumper. at the rate they are dropping who knows how long they will last.

2008 Oct 09 08:06 PM

[bigeasy8:]

I gotta believe that Balmer is licking his chops and Yang at this point would want to find a face-saving solution that would help Yahoo before it goes under $10. He can blame Yahoo's recent woes (and lack of an effective gameplan) on the recent severe downturn in the economy and maybe agree to a $22 deal now.

2008 Oct 10 12:32 AM