Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Yahoo! Inc. (YHOO)’s Bubble Burst Just Around the Corner

Yahoo! Inc. (NASDAQ:YHOO)‘s investors who have shown great enthusiasm in the company because of Alibaba Group Holding Ltd (NYSE:BABA)’s IPO are soon about to face the harsh reality that Yahoo is not as good a business as they thought it is. CNBC discussed Yahoo! Inc. (NASDAQ:YHOO)’s health as a business  today with senior analyst at JPM Securities, Ronald Josey.

Yahoo icon

“[…] Frankly we here think that Yahoo! Inc. (NASDAQ:YHOO) will, investors will likely focus more on operations and that is something that they are in a turn around. We do have, we are focusing on their display business which isn’t growing very quickly or at all and so we are looking for a turnaround […],” said Josey.

It is very hard to find any flaw with Alibaba Group Holding Ltd (NYSE:BABA) as a business, which is currently growing at more than 40%,according to Josey, and that will in all likelihood make today’s IPO a success.

However,  what does that mean for Yahoo! Inc. (NASDAQ:YHOO)? It means an investment that is worth $20 to $25 billion  but what good as it if Yahoo! Inc. (NASDAQ:YHOO) cannot invest it profitably. Yahoo! Inc. (NASDAQ:YHOO) has not revealed any concrete plans on focus areas for the money that the company is just about to be handed out.

If the investors in Yahoo! Inc. (NASDAQ:YHOO) are relying on the stake that the company has in Alibaba Group Holding Ltd (NYSE:BABA), they don’t have to keep Yahoo in their portfolios after today. They can go ahead and purchase Alibaba directly instead. This will have serious consequences on Yahoo’s stock price which has risen significantly in the wake of Alibaba’s IPO.

Exactly how many of these investors had temporarily parked their funds in Yahoo! Inc. (NASDAQ:YHOO) to play Alibaba pre-IPO, will be revealed today and in a few more days as investors move their funds to their final destination. As of right now Yahoo! Inc. (NASDAQ:YHOO)’s stock price stands at $42.08.

Disclosure: none

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!