When Yahoo! Vice President Brad Garlinghouse penned the infamous Peanut Butter Manifesto in October 2006, there was reason to hope that some new ideas and energy might actually spring up from within Yahoo! to shake some of the scales from this organization's eyes.
Two years later, that letter's call for changes have gone unanswered and the prescriptions are as relevant now as they were then. I suspect the same will be said again two years from now.
Anyone holding a long position in Yahoo! is doing so for the potential value their assets might fetch in a company sale to Microsoft, not for the potential increased value current management might create from extending the current assets. It is likely that some kind of deal with Microsoft will happen. Microsoft continues to be exactly nowhere in terms of search and Web services traction.
Yahoo!'s proposed deal with Google (GOOG) appears to have stalled in regulatory approval. Most importantly, Yahoo! is trading at its early-2003 levels -- 59% below its Feb. 12 close after the Microsoft bid earlier this year.I judged I couldn't continue to hold Yahoo!'s stock based on a strategy of hoping that Steve Ballmer will come back to the negotiating table. As he's bidding against himself, he has no incentive to come back now versus waiting and watching Yahoo!'s stock continue to drop. And, with the frozen credit markets and large media companies having seen their market capitalizations drop 30%-60% in the last month, make no mistake: Microsoft is still going to be the only bidder for Yahoo! in the foreseeable future.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV