With all eyes now fixed on the speculated sale of Yahoo (NASDAQ:YHOO), weak Q3 results could not make much of a dent on Yahoo’s stock [1] with the company’s stock actually rising post the earnings release. [2] With Google (NASDAQ:GOOG) also in the fray to potentially provide financing for Yahoo’s acquisition, we expect Yahoo’s stock to remain resolute relative to its past declines.
See our full analysis for Yahoo’s stock here
Contradictory Stock Movement Reflects Shareholder Mind-Set
With weak Q3 results, it seems that shareholders are further convinced that Yahoo is the ideal acquisition target, given that the company has tried hard enough to get the most out of its display ad business. With most of Yahoo’s content-based partnerships providing at-best weak results, any development that takes the company closer to a sale could provide further northward movement to the stock.
Why is Google Interested?
With Google showing interest in financing a possible Yahoo acquisition, [3] the former has made a smart move on its part. The company is under heavy scrutiny from U.S. regulators at present over alleged anti-trust behavior, and the willingness to aid Yahoo might at least soften this monopolistic image in the public eye. Additionally, given Google’s global dominance in the PC and mobile search market, it is unlikely that it would view Yahoo as a serious threat anytime soon.
We have a revised price estimate of $17 for Yahoo’s stock, which is about 5% above the current market price.
Understand How a Company’s Products Impact its Stock Price at Trefis
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