Yahoo! Inc. (NASDAQ:YHOO)’s stock is trading at about $38.9, down approximately by 8% in the last three trading days, September 23 included. Frank Value Fund Portfolio Manager, Brian Frank, and S&P Capital IQ senior equity analyst, Scott Kessler, shared their opinions on FOX as to what might become of the software company. It’s possible to see some other company purchasing Yahoo! Inc. (NASDAQ:YHOO) as it is currently undervalued, unless the latter comes up with a whole new style of doing business.
Yahoo! Inc. (NASDAQ:YHOO) bought Tumblr, Inc. for $1.1 billion and failed to monetize the acquisition. In fact, compared to Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB), Yahoo! Inc. (NASDAQ:YHOO) does not have enough dominance on the market to actually improve its position through a purchase of a new company.
“Yahoo is an older asset. They really have to create something from nothing. They have to be a startup again, and maybe that’s why she [Marissa Mayer] hired all these engineers. They’re coming out with some interesting way to attack mobile,” said Brian Frank.
Now, it’s clear that Yahoo! Inc. (NASDAQ:YHOO)’s value is not negative and not even close to zero, the firm does not have problems with capturing attention, however, it seem to face difficulties into turning a profit out of its core activities. Possibly a larger tech entity senses potential in the fading star and might want to benefit from the current stock’s low pricing.
“If Yahoo! remains undervalued as we think it is then we could see the potential for other interested parties to get involved in this situation. To be honest with you, when you look at the likes of an Alibaba or a Softbank, both the people responsible for running those businesses last week said that they wouldn’t rule out looking at Yahoo!,” stated Scott Kessler.
In any case, Marissa Mayer has to come up with something that would head her company towards a more productive future, besides, she already has practically as much cash, about $7 billion, as the company’s worth.
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