Yahoo! Escapes a Jam

You might have thought the now-infamous "Peanut Butter Manifesto" would have turned shares of Yahoo!(YHOO Quote - Cramer on YHOO - Stock Picks) into jelly.

After all, while investors have known all is not well at the Internet company, the extent of the turmoil revealed in the note was still surprising. It turns out that while CEO Terry Semel said he had a plan during the company's latest conference call to close the search gap with Google(GOOG Quote - Cramer on GOOG - Stock Picks) and extend its leads in the fast-growing social media and mobile segments, much of Yahoo!'s own senior management was still feeling that the company lacks a vision.

So, why does Wall Street seem to have more faith in Yahoo! than Semel's own lieutenants?

Shares of the Internet company have rallied 22% to $28.15 since the company's mid-October announcement of disappointing results and a soft fourth-quarter forecast, blowing past the Nasdaq and S&P 500 in that time frame. And the public airing of Yahoo!'s dirty laundry didn't give investors a reason to pause. The stock is up 5.4% since news of the memo spread this weekend.

An analyst note released Wednesday summed up the bullish case. Yahoo! is oversold at this point, and the numerous initiatives the company has in its pipeline -- ranging from upgrading its advertising platform to announcing a deal with newspapers -- will pay off in 2007, American Technology Research analyst Rob Sanderson wrote, raising his price target from $31 to $34.

« Previous Page

1 2

Next Page »