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Carol Bartz is out as CEO of Yahoo! |
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after fulfilling only two thirds of contract. |
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Released on Wednesday, September 7, 2011, 2:00 AM ET
Pittsburgh, PA (SpeculatingStocks) - Yahoo! Inc. (YHOO) let go of Carol Bartz as CEO after fulfilling only two-thirds of her contract. CFO Tim Morse was named interim CEO until the board finds a more suitable replacement.
Yahoo! has been taking it hard over the past several years -- although it has been showing strong consistent quarterly gains -- its stock price has now reached a rock bottom $12.91 per share (4:00PM EDT), only a dollar above its 52-week low. It has already gone up to $13.72 per share in after-hours trading (7:59PM EDT).
Now looks like a great time to buy, with YHOO’s market cap at $16.3 Billion, one-tenth of GOOG. Yahoo! has a strong fundamental standing, with assets of $14 Billion and only $2 Billion in total liabilities. They also have $2.6 Billion in working capital making them able to pay any liabilities on their balance sheet. Also, Yahoo! Inc. has low long-term debt of only $725 Million. Finally, YHOO has a stable beta of 0.87 making it slightly more resistant than market trends.
To add to this package, Yahoo!’s EPS is a nice 0.88 coupled with a stable P/E ratio of around 15.
The future of Yahoo! Inc. has several possibilities. It can be taken over by a private equity buy-out, bought out by a competitor, such as Microsoft who offered to purchase the company in 2008 at $31.00 per share, or continue to operate under its own umbrella. But whatever the future holds -- right now Yahoo! appears to be a strong buy.
Carol Bartz removal by the Yahoo! board of directors is a welcomed relief to many shareholders who believe that Bartz was more of a drain than a gain on Yahoo!’s financial standing. Typically the loss of a CEO can spell disaster for a company, especially one as large as Yahoo!, but in this case Carol had to go.
Because Yahoo! stock is nearing its 52-week low and has stable financials and consistent revenue production in excess of operating expenses and other deductions, it should be an all-day buying opportunity on September 8th, with a little market volatility expected in the first few hours of trading. There may be no need to get in and get out with this one, expect to see a long-run rally and rebound with YHOO, particularly after they name the successor CEO. Add to this the possibility that Yahoo! Inc. could be bought-out at a premium with the ever competitive technology market, and you have a done deal.
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