NEW YORK (
) -- Along with the broader market,
has been sacked this week.
It is now back to where it was trading in early October. Last week, Yahoo! was up more than 25% in the last month. It's now only up 13% for the last month. (
is still up 7.6% for the last month.)
Don't get me wrong, I don't like that. It stinks, in fact.
However, let's take a step back from the ledge.
There were five things that were reported on with certainty last month that were not necessarily certain at all.
1. A couple of weeks ago, many media reports said that Jerry Yang told the AsiaD conference in Hong Kong that he wasn't going to sell the company. That was odd, as I was in the audience and don't recall him saying that at all. I forget his wording.
He might have said they weren't going to be a forced seller or they didn't have to sell if they didn't want to. He was saying they are playing from a strong hand. Maybe it was a bluff. Later on in the discussion, he said very clearly that they (the board) were going to do what was right for the shareholders. I took that to mean that -- just as everyone suspects -- this thing is still in the middle of a sales process.
Wall Street Journal
article a couple of weeks ago quoted some private equity bidders as saying they thought Yahoo! was only worth $16 to $18 a share in a buyout and was already over-priced at $15 as the stock was at $11 in August. Really? I think
has a fair value of $25 a share. It's all hype and I'd really rather buy it at that price than $400.
report on Friday night interrupted an otherwise pleasant dinner I was having. It quoted -- in its "scoop" - "5 unnamed sources" who said that Yahoo! was going to separate their Asian assets in a tax-free manner that would lead to a stock buyback or a dividend.
I immediately started getting emails and tweets from folks saying "they are screwing the shareholders" presumably because they aren't selling the Asian assets to someone who would have to pay 35% on assets worth $20 billion according to Yahoo! So, Yahoo! found a way to save $7 billion and that caused the stock to drop 10% or $2 billion on Monday.
This scoop about the "cash-rich split" method of tax savings was actually reported the previous day by the Wall Street Journal as a "scoop." Except I first discussed the cash-rich split method six weeks earlier than that in TheStreet as to what the Yahoo! board should do. Glad they listened.
So, once again, I'm trying to understand where the board was destroying value -- and we don't even know that any of this is true. For all we know, these five unnamed sources could be KKR, Silver Lake, DST, TPG Capital, and Hellman & Freidman -- all trying to bang down the price of Yahoo.
4. David Kenny stepped down from
board last week and speculation began immediately at how he was going to be named the next Yahoo! CEO. I spoke out last week about how Kenny left because he was a terrible fit for Akamai, where he was hired to start a new advertising analytics business. Then he decided to go on Yahoo!'s board to pump up his own reputation and burned bridges with Akamai's CEO. I said there was no way he'd be Yahoo!'s next CEO. He confirmed that on Tuesday.
5. They buy a company called
for $270 million. People started immediately wondering, "Why is this company buying anybody if they're up for sale?" Except that they're not sold yet. Who knows if a deal will happen. Yahoo! has $6 billion of digital online ad revenues in 2010, second only to
Yahoo!'s revenues were three times that of
and six times that of
It reported weakness in the second quarter in display advertising causing an earnings miss, shareholder hand-wringing, and Carol Bartz's ouster. So it bought a company in Interclick to help improve that area. The deal apparently has been in the works since the summer (when the weakness emerged). I think this is a horrible board as much as the next guy, but they didn't get drunk last night and decide to blow $300 million on a lark acquisition.
There is a lot of mindless tweeting and writing about Yahoo! these days. I can't believe all the folks at the Wall Street Journal,
New York Times
, and Bloomberg falling over themselves for a "scoop" that actually means nothing in the grand scheme of what's happening.
Kara Swisher has been steady, consistent, understated, and correct about Yahoo! for the last four years that I've been following the company closely.
All this ignorance swirling out there is disconnected from what's actually going on at Yahoo! these days.
I expect a deal to happen before the end of January.
At the time of publication, Jackson was long Yahoo! and Apple.
Eric Jackson is founder and president of Ironfire Capital and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd. You can follow Jackson on Twitter at www.twitter.com/ericjackson or @ericjackson