Hashemian Blog
Web Tools, Financial Markets, Technology
Tuesday, April 22, 2008
Yahoo Beats, Microsoft Next
As I had expected, Yahoo reported good earnings, but nothing spectacular. The stock has received a slight dent in after-hours, most likely the effect of selling into the good news. Chances are, barring any big news, it'll stay relatively flat tomorrow.
The question still is whether Yahoo can maintain the earnings going forward. I believe most people don't have much faith in that. One quarter is hardly an indication of a trend.
The bigger question, however, is the status of Microsoft's offer. A better indication might arrive on Thursday when Microsoft reports its own quarterly earnings. Even with Vista's slow uptake, my feeling is that it will show healthy earnings. Microsoft has a long history of under-promising and over-delivering on earnings. The weak dollar will probably help its bottom-line considerably as well. Many U.S. companies have gotten a boost from the weak dollar, offsetting their weaker domestic intake with higher overseas revenues.
While many believe that Microsoft's acquisition of Yahoo is inevitable, there is still plenty of twists and turns left in this saga, including piercing the defenses of some heavy-weights such as Google, News Corp., and Time Warner, who would want to see this takeover derailed.
microsoft,yahoo,google,earnings,weak dollar,vistaLabels: earnings, google, Microsoft, vista, yahoo < Yahoo Beats, Microsoft Next>
// posted by rh
Monday, April 21, 2008
Yahoo's Earnings
Yahoo is slated to report its earning tomorrow after the market close. If it can pull off what Google did last week, the stock should rise to about $35.
Then again, that was Google and there was plenty of pent-up demand from buyers. The stock had been pounded so bad that there was nowhere for it to go but up. The good earnings news only gave it the additional momentum it needed to explode way up. Yahoo's stock probably won't see a 20% rise on Wednesday no matter how good its earnings.
Given Yahoo's snobby attitude towards Microsoft's advances, one has to surmise that it's feeling pretty comfortable with its earnings. A good report will validate its position in resisting Microsoft and holding out for a higher offer while giving it much bigger bargaining power. On the flip side, if the earnings are dowdy, little doubt will remain that Microsoft would prevail in its takeover efforts.
It's ironic, but I'm sure Google is rooting for Yahoo to report stellar earnings and fend off Microsoft. I've already seen Yahoo ads on Google's network and Yahoo is probably getting a good deal on these.
If early indications have any value, my bet is on Yahoo reporting decent earnings. If nothing, that would be another signal of strength in the Internet market. Of course, if I were so sure, I would have picked up a few call options myself, which I haven't. The May 08, $30 call strikes saw plenty of activity today. No doubt, more of the same tomorrow. Then again a lot of it could be from traders protecting short stock positions.
stocks,options,yahoo,google,microsoft,earningsLabels: earnings, google, Microsoft, options, stocks, yahoo < Yahoo's Earnings>
// posted by rh

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