from the where-is-the-den-of-forty-thieves? dept.
From an article at Medium.com :
You head an Internet company. It has a billion users. Your social product alone has over 400 million users and is actually kind of hip. You bring in four billion dollars of revenue a year, a billion of that in mobile. You make a profit! You’re the third biggest search engine. You are Katie Couric’s boss.
And yet…your company is worth less than zero.
That financial version of an Escher-esque contortion is familiar turf to Yahoo CEO Marissa Mayer. The Yahoo market cap is around $44 billion. That valuation includes its ownership of 15.4 percent of the Chinese e-commerce giant Alibaba. That’s worth about $38 billion. Yahoo also has a long standing investment in Yahoo Japan, a separate company it co-founded in 1996. It’s worth around $7 billion. Those numbers can fluctuate. But there are days when you add those up and you can reach the odd actuarial conclusion that Yahoo’s core business—which has been looking a lot better since Mayer got there—has negative value.
See also: Parmy Olsen’s story in Forbes, “Finding Alibaba: How Jerry Yang Made The Most Lucrative Bet In Silicon Valley History”
(Score: 3, Insightful) by takyon on Thursday March 05 2015, @10:57PM
What's with Yahoo! giving into activist investors and losing billions multiple times? Couldn't Yahoo!'s leadership have bought back enough of their own shares to resist costly Alibaba poaching? Of course, that may have required predicting the extent of Alibaba's IPO success.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2) by bob_super on Friday March 06 2015, @02:30AM
There have been many companies sold for a symbolic dollar/euro because of their liabilities, even some -barely- profitable ones. Airlines with billions in real assets and millions of physical customers...
(Score: 4, Interesting) by anubi on Friday March 06 2015, @03:39AM
Then they overdid it.
Advertisements, scripts, slow loading pages, and if I remember right, they got into some sort of deal with SBC to enforce having to use a special program to get to the internet.
That's when I pulled the plug and went to another ISP. At the time I switched to using Dogpile as the search engine, later Google. I hung onto Yahoo a bit longer just for the groups, but later requirements to participate in groups made it so burdensome I finally abandoned it.
I never went back to Yahoo for anything.
Why put up with all those script laden pages? Yahoo was a big company; their business was with business-men anxious to strike up a partnership with them, not me.
Why this same thing hasn't happened to Microsoft is beyond me. I find it incredible how much crap people will put up with and still buy their stuff. If enough of would do it, we could have a true public OS, and also lay down a new business protocol of not letting remote webmasters play havoc in our machines via scripting. Any business wrapping his page in scripting would be received like a printed flyer in your mailbox, reeking of cat piss.
Besides, I would bet the whole valuation of the company being so low is just a tool used by the controlling elite so that the little-guy investor gets nothing. All the income becomes "operating expenses", shared among the elites as bonuses anyway.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2, Disagree) by GungnirSniper on Friday March 06 2015, @03:54AM
You switched your ISP because of your home page? Do you use the Blue E to get online?
Tips for better submissions to help our site grow. [soylentnews.org]
(Score: 2, Informative) by anubi on Friday March 06 2015, @06:45AM
No. Firefox.
And no, it wasn't just the home page... they had some software they wanted me to load to be able to access the net through SBC... looked like some AOL or Juno kinda thing. I did not want anything to do with it.
I wanted what I had. Same as I have now. Plain old internet. Without anyone's proprietary interface.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 0) by Anonymous Coward on Friday March 06 2015, @04:03AM
If Yahoo's investments are worth more than Wall Street thinks Yahoo is worth, it doesn't mean Yahoo is worth nothing. To say it's worth less than zero is weird/stupid math.
In contrast if Yahoo's liabilities are far more than Wall Street thinks Yahoo is worth then you have a better argument for saying Yahoo is worth less than zero.
On the other hand to say Yahoo costs less than zero or is undervalued might make sense if you are able to buy Yahoo, sell off its investments etc and make a profit.
(Score: 2, Informative) by Anonymous Coward on Friday March 06 2015, @04:38AM
This is where you figure out what YHOO is worth.
https://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics [yahoo.com]
https://finance.yahoo.com/q/is?s=YHOO+Income+Statement&annual [yahoo.com]
https://finance.yahoo.com/q/bs?s=YHOO+Balance+Sheet&annual [yahoo.com]
https://finance.yahoo.com/q/cf?s=YHOO+Cash+Flow&annual [yahoo.com]
From what it looks like they have a yoy groth of -1% and are selling shares to keep up the cash flow. Accounts receivable is declining and their depreciation of assets is gaining them more cash that actual income. Increased their debt load by 10x.
Their investments on the other hand are doing fairly well. Their opex is fairly stable. They have a sizable cash store bigger than their debt.
So they are 'sick' but could turn it around. They will have to make product people want. And make it so investments of cash is not their best bet. Otherwise they will just turn into a VC firm. Which could be very profitable....
(Score: 2) by richtopia on Friday March 06 2015, @03:28PM
No - but that is because I don't have money right now for speculative investing.
The article effectively reads that the company is undervalued. Currently the core business is evaluated negative. If you feel that Yahoo produces a product worth something, then this is a good investment.
I'm not thrilled with Yahoo, but whenever Firefox updates and I have to use it (WHY FIREFOX???? I DELETED ALL ENGINES BUT DDG, WHY BRING THEM BACK) I'm not horribly disappointed (unlike quite few years ago, when Yahoo was an eye-gouging experience).