Yahoo LEAPS: Like Stealing Babies From A Candy Store [View article]
gymbo,
Alibaba can’t buy back the 2nd tranche of Yahoo’s stake in the company unless Alibaba holds an IPO by 12/2015. The way the TIPLA clause in the deal is structured, Alibaba is incentivized to move a lot sooner than that.
The Alibaba liquidation is obviously a concern if the money is returned to investors in the form of a dividend, rather than a buyback, but as the IPO hasn't happened yet and Yahoo will continue to own a significant stake in Alibaba...although that could wind up being a double-edged sword if Alibaba's craters. (Yahoo's IP royalty stream will be correspondingly reduced, as well.)
18 months is a long time in the markets. The Chinese housing bubble could collapse and wreck the global economy. Germany could leave the Euro. Investors could overreact to tapering bond purchases by the Fed. All of these scenarios have the potential to tank consumer confidence, and hence, advertising budgets. On the other hand, none of these Macro nightmares constitutes a black swan event (i.e. they're "known unknowns".)
Yahoo LEAPS: Like Stealing Babies From A Candy Store [View article]
Cornwall Capital was profiting off of this technique for years prior to receiving their ISDA. Moreover, I never said the companies were equivalent, only that a tech company shouldn't be trading like a mid-range department store chain.
Yahoo LEAPS: Like Stealing Babies From A Candy Store [View article]
Michael,
That's a very elegant solution, actually. Thank you.
Something I noticed when I was tracking my position today is small daily changes have out-sized effects on the price on LEAPS. An approximately 2% hit to YHOO has eroded the price of YHOO LEAPS by nearly 20%.
Stocks have mostly erased big early losses, with the Dow (DIA, DOG) just nosing into the green - its outperformance a result of H-P's 14% jump. The S&P 500 is off 0.3% and the Nasdaq off 0.1%. [View news story]
The barriers to entry may be low, but so is the chance of success. Four years, four dominant social media sites: Facebook, Tumblr, Pinterest, and Twitter. If all it throwing money and talent at the problem was all it took to go viral, Google+ would be a breakout success by now.
I don't think most investors truly grasp the significance of this acquisition due to the fact that they're older than the target audience and are therefore behind the curve. Tumblr is the most popular website since YouTube with the sub-25 population. $1 billion is NOTHING.
If we keep moving up like this, stocks could go "parabolic," says Art Cashin. The stocks that have the heaviest short positions have already raced ahead of the indices, and they are going to crumble if we keep going. (Video). [View news story]
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
Gold miners (GDX -3.2%) take another beating as gold continues to lose its allure amid disclosures of reduced bets by hedge funds, a World Gold Council report showing gold demand at a three-year low, and a surging dollar. For the miners, it's an ugly world of lower production, higher costs and falling prices. At least nine miners hit 52-week lows: NEM -3%, GG -2.7%, AUY -4.8%, HMY -6.3%, AU -2.5%, BVN -1.1%, ANV -7.4%, NG -2.7%, GSS -5.8%. [View news story]
What's up is that Gold ETFs are what's been driving the price, and the Eastern buyers are beginning to look like a lagging indicator, instead of a leading one.
With Tumblr speculation swirling, Yahoo (YHOO -0.3%) has scheduled a Monday evening NYC press event; CNBC reports Marissa Mayer will speak. Wells Fargo gives an overview of Tumblr's opportunities/risks. The firm notes comScore estimates Tumblr had 115M PC unique visitors in April (+85% Y/Y) and 14.5M mobile visitors (+227%), that engagement is strong, and that Tumblr is targeting $100M+ in 2013 revenue following just $13M in 2012 (ad sales are only starting to ramp). Wells thinks Yahoo could monetize Tumblr the way it did Flickr, but also points out the site has a ton of "provocative and even salacious material" that could deter brands. [View news story]
"...but also points out the site has a ton of "provocative and even salacious material"
Ultimately, what advertisers care about is eyeballs.
Yahoo LEAPS: Like Stealing Babies From A Candy Store [View article]
Alibaba can’t buy back the 2nd tranche of Yahoo’s stake in the company unless Alibaba holds an IPO by 12/2015. The way the TIPLA clause in the deal is structured, Alibaba is incentivized to move a lot sooner than that.
(See: http://onforb.es/11fB2j4)
The Alibaba liquidation is obviously a concern if the money is returned to investors in the form of a dividend, rather than a buyback, but as the IPO hasn't happened yet and Yahoo will continue to own a significant stake in Alibaba...although that could wind up being a double-edged sword if Alibaba's craters. (Yahoo's IP royalty stream will be correspondingly reduced, as well.)
18 months is a long time in the markets. The Chinese housing bubble could collapse and wreck the global economy. Germany could leave the Euro. Investors could overreact to tapering bond purchases by the Fed. All of these scenarios have the potential to tank consumer confidence, and hence, advertising budgets. On the other hand, none of these Macro nightmares constitutes a black swan event (i.e. they're "known unknowns".)
Yahoo LEAPS: Like Stealing Babies From A Candy Store [View article]
Yahoo LEAPS: Like Stealing Babies From A Candy Store [View article]
That's a very elegant solution, actually. Thank you.
Something I noticed when I was tracking my position today is small daily changes have out-sized effects on the price on LEAPS. An approximately 2% hit to YHOO has eroded the price of YHOO LEAPS by nearly 20%.
Higher Interest Rates Don't Necessarily Mean Lower Equity Prices [View article]
Stocks have mostly erased big early losses, with the Dow (DIA, DOG) just nosing into the green - its outperformance a result of H-P's 14% jump. The S&P 500 is off 0.3% and the Nasdaq off 0.1%. [View news story]
Tumblr: Weighing Yahoo's Acquisition [View article]
What Equity Bubble? This Bull Run Has Only Just Begun [View article]
Yahoo's (YHOO) board has approved a $1.1B all-cash deal to acquire Tumblr, the WSJ reports. (previous) [View news story]
http://bit.ly/YTGcia
Yahoo's (YHOO) board has approved a $1.1B all-cash deal to acquire Tumblr, the WSJ reports. (previous) [View news story]
I don't think most investors truly grasp the significance of this acquisition due to the fact that they're older than the target audience and are therefore behind the curve. Tumblr is the most popular website since YouTube with the sub-25 population. $1 billion is NOTHING.
If we keep moving up like this, stocks could go "parabolic," says Art Cashin. The stocks that have the heaviest short positions have already raced ahead of the indices, and they are going to crumble if we keep going. (Video). [View news story]
Confidence Boom? [View article]
The Sell-Off In Gold Has Become Plain Silly [View article]
The Fed hasn't lowered "real" interest rates enough, says Minneapolis Fed chief Kocherlakota, not disappointing his new fans. Somewhat hawkish until a near-religious conversion last year, Kocherlakota is now the most dovish on the FOMC (though not a voter this year) and fond of making statements like that. [View news story]
Gold miners (GDX -3.2%) take another beating as gold continues to lose its allure amid disclosures of reduced bets by hedge funds, a World Gold Council report showing gold demand at a three-year low, and a surging dollar. For the miners, it's an ugly world of lower production, higher costs and falling prices. At least nine miners hit 52-week lows: NEM -3%, GG -2.7%, AUY -4.8%, HMY -6.3%, AU -2.5%, BVN -1.1%, ANV -7.4%, NG -2.7%, GSS -5.8%. [View news story]
With Tumblr speculation swirling, Yahoo (YHOO -0.3%) has scheduled a Monday evening NYC press event; CNBC reports Marissa Mayer will speak. Wells Fargo gives an overview of Tumblr's opportunities/risks. The firm notes comScore estimates Tumblr had 115M PC unique visitors in April (+85% Y/Y) and 14.5M mobile visitors (+227%), that engagement is strong, and that Tumblr is targeting $100M+ in 2013 revenue following just $13M in 2012 (ad sales are only starting to ramp). Wells thinks Yahoo could monetize Tumblr the way it did Flickr, but also points out the site has a ton of "provocative and even salacious material" that could deter brands. [View news story]
Ultimately, what advertisers care about is eyeballs.