Yahoo! Inc. (NASDAQ:YHOO) experienced an upward spike in its stock price as the news of Starboard’s Letter to Yahoo hit the market, but is it enough for investors to start placing their trust and money in the company again? Jim Iuorio of TJM Institutional Services, and Jeff Kilburg of KKM Financial discussed this new development on CNBC.
Iuorio’s comments about Yahoo! Inc. (NASDAQ:YHOO) likened the analogy of a mousetrap where Starboard’s letter is a small block of cheese that will lure the investors to their death. He believed that Yahoo! Inc. (NASDAQ:YHOO)’s fundamentals should be the focus and not external events like Starboard’s letter or even Alibaba Group Holding Ltd (NYSE:BABA)’s IPO like in the past. These fundamentals, according to Iuorio, didn’t paint a rosy picture at all. In fact quite the opposite.
“[…] It seems that a lot of times we are buying Yahoo! Inc. (NASDAQ:YHOO) for factors that aren’t specific to Yahoo. One, they luckily bought Alibaba; two, this potential AOL merger. We never really concentrate on the company itself and that is troubling me too. Remember that a third of the revenue is still from search, something that they don’t do nearly as well as Google Inc (NASDAQ:GOOGL) […],” said Iuorio.
Expanding on how much he values Yahoo, Iuorio added that if he owned the company’s stock he wouldn’t sell it below $37.25, but he didn’t have any intentions to buy it in the nearest future.
Kilburg on the other hand emphasised the growth prospects of Yahoo. He said that he was long in the company and had faith in Yahoo! Inc. (NASDAQ:YHOO)’s CEO, Marissa Mayer’s capabilities in investing the cash proceeds from selling a part of the company’s stake in Alibaba’s IPO. He also cited that Yahoo! Inc. (NASDAQ:YHOO) has had experience with activists before like Dan Loeb in 2011 and the result was an increase in stock price as he shook some things with the company’s management.
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