One thing Mayer has going for her is the billions in cash Yahoo! received in the deal to sell a part of its Alibaba stake, not to mention to the significant holdings it still has left. Yahoo! had approximately $7.89 a share in cash at the end of the September quarter, according to BGC Partners analyst Collin Gillis. Gillis also noted that the "market value of Yahoo's 35% stake in Yahoo! Japan and approximately 24% stake in Alibaba.com was valued on September 30, 2012 at $15.84B, approximately $13.25/share." Those two add up to over $21 per share, suggesting the market is not valuing core Yahoo! at much, if anything at all.
Munster, like many on Wall Street, is looking to see if Yahoo! will talk about how to allocate some of this significant cash hoard towards acquisitions to strengthen its properties. There have been a few small "acqui-hires," including Stamped, an iPhone app purchased in October, and OnTheAir, purchased in December.
The former Google (GOOG) executive will have to show more detail on her plan to fix the company. J.P. Morgan analyst Doug Anmuth wants to see "more granularity" on how Mayer intends to turn Yahoo! around. In a research note, Anmuth explained that he wants to hear about Yahoo!'s plans to reinvigorate search and display, its investment strategy, new talent recruitment efforts, and what new CFO Ken Goldman has to say. Anmuth rates Yahoo! "neutral" with a $19 price target.
There's also the question of the search deal with Microsoft (MSFT), which could expire at the end of the first quarter. Mayer has repeatedly said she's happy with the deal, but also noted there's been some disappointment as well. "From my perspective on the strategic alliance, we have been happy working with Microsoft. The teams actually work quite well together. We experienced some disappointment on the monetization side, which is why the revenue guarantee is in place and why we're benefiting from it," Mayer said on the third quarter earnings call.I want to see the actual results later today before I go writing any apology cards or love ballads. Interested in more on Yahoo!? See TheStreet Ratings' report card for this stock. --Written by Chris Ciaccia in New York >Contact by Email. Follow @Commodity_Bull
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
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
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
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 + 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