Posts Tagged ‘YHOO’

Why I keep bashing Yahoo(YHOO) and AOL(AOL)

By: ispeculatornew | Date posted: 03.03.2010 (5:00 am)

I might be one of the more vocal critics of Yahoo and AOL (and of web conglomerates in general) but to be honest, these companies are not making it easy for those defending them. It seems like almost every week I hear news that is truly stunning (not in a positive way) about these 2 stocks. If would love nothing more than to have someone come here to argue that these companies have a bright future. Both of them used to own the web in some way, and used to be the most influential companies at their prime. But that time seems like decades ago already. Here are a few examples from the past week:

2/24/2010: Yahoo announces a content partnership with Twitter. Remember when Google was blamed for copying Microsoft’s move a few months ago to do just that? Google had answered within 24 hours about its intentions to do the same. Why then did it take Yahoo so much more time? Was everyone asleep? Better late than never? Sure…but why be late if you can actually do it at the same time as competitors?

3/1/2010: Arguable Yahoo’s most valauble property, Flickr had its photo editing partner, Picnik, purchased by Google, which will make it akward for Flickr but will also help Google better compete. Of course today, Yahoo’s CEO announced they would be focusing on small acquisitions. Couldn’t you have thought about buying one of your main partners before competitor Google jumped in?

3/1/2010: AOL announces the sale of Buy.at for $17 millions. What’s bad about it? They actually bought it two years ago for $125 millions. And no, this did not happen during a dot com bubble or anything of the kind. A recession? Yes. But how many assets do you know that lost over 85% of their value? Bravo AOL once more.

3/2/2010: AOL CEO now says that its revenues will be shrinking in Q1, because of a tough environment. Analysts meanwhile say the problem is at AOL and that other web companies will show growth….

3/2/2010: Yahoo CEO Carol Bartz when asked why its compaany was not as “hot” as Facebook: “Remind me what’s their revenue?”. Seriously? You are dissing one of the top 2-3 companies on the internet? Let’s have this revenue discussion in a year or two….

Remember that all of this happened in just a few days… Just a reminder of how bad things are for these two companies. What made my day though was reading an article suggesting that Yahoo should buy AOL. Why not right? Surely things can’t get worse right?

Any thoughts? I would love someone to come defend AOL here.

New Stock Pick: Long Research in Motion(RIMM) / Short Yahoo(YHOO)

By: ispeculatornew | Date posted: 03.02.2010 (5:00 am)

To many, this might look like an odd pair to trade. And in many ways, I agree that it is. I was looking at my screen today trying to see the better opportunities and I thought the best opportunity right now is Research in Motion(RIMM). Yes, it continues to be under attach from both Apple(AAPL) and Google(GOOG) with Palm(PALM) slowly being taken out of the market. So the logical step was to pick RIMM against either AAPL or PALM. But I do already have a long position on AAPL (not that I would short Apple anyway… it would be almost as bad as shorting Baidu). Shorting Palm would be something to consider but at this point, Palm is down over 40% this year alone and everything seems to be going awfully wrong for the smartphone maker with its stock going dangerously approaching 5$.

Reaching that point is significant because many investors (institutional) do not have the authority to own low priced stocks (often defined as stocks below 5$) and so it could continue to fall for a while. So why not go short Palm? Because no matter what the company is, when its stock gets crushed so badly, at some point there will be a rebound. So I prefer going short a stock that should get crushed, instead of one that already did!

TickerNamePricePE RatioPE Next YearReturn YTDSales GrowthAnalyst ratingBook ValueBetaRevenue/ShareSales 5Y Avg GrowthEPS 5Y Avg Growth
PCLNPriceline Group Inc/The1245.932.8919.437.1829.134.68137.971.26133.428.9537.44
PPandora Media Inc24.54N/A47.84-7.74132.524.092.511.823.54N/AN/A

All regular readers here will not be surprised to see me go short Yahoo(YHOO). Last year, I did two trades on the stock (going short both times), and both ended up doing well. Among the stocks I follow, Yahoo seems to be the most overvalued right now. It trades at a P/E of 39 which is crazy for a company that is regressing right now instead of improving – its sales have actually been declining. It does have some assets worth mention but those are few and far between.

You can also take a look at the following chart published by TechCrunch about Yahoo users.. nothing more to say, case closed!

Anxious to invest in social web…

By: ispeculatornew | Date posted: 02.23.2010 (5:00 am)

I have written a few times about the anticipated IPO’s by Facebook, Twitter and LinkedIn and while all three continue to gain importance in the internet sphere, we do not have any more details about the timing of their public offerings. All networks are doing their best to show that they are the “popular choice”. Why? Because many believe that there will only be a few survivors in this new battle.

Social networks showing off????

Just take a look at the impressive graph posted by Twitter yesterday showing an exponential growth in activity. Facebook posted less than two weeks ago about reaching 100 million users and they do seem to be the two major leaders right now. But investing in both is next to impossible right now for regular investors so we are left with smaller players.

Other possibilities???

Yahoo owns Flickr, which in my opinion remains its most valuable property. But that being said, as regular readers of this blog would know, I am not a fan of Yahoo and would certainly not be the one to recommend using them as a social play. That leaves Google, which owns both Youtube and the recently launched Google Buzz.  Youtube is huge and will surely become an important center of profit in years to come but the problem is that at least for now, Google is hardly a play on social. Truth is that an insignificant portion of the revenues and profits come from Youtube and obviously from Google Buzz.

Stuck with nowhere to go then???

So that leaves us with no other option than patience, which is a shame as in many ways, Social and Search are now the two most important aspects and would certainly provide many investing opportunities.

Am I the only one anxious to get in the game??