] HipMojo.com » Stop the Presses: Yahoo!’s Stock Crossed $30; Market Cap Crossed $40 billion

Stop the Presses: Yahoo!’s Stock Crossed $30; Market Cap Crossed $40 billion

Yahoo!’s 52-week high and low might be $34.09 and $22.65 respectively, but traders and investors today realized that the much-maligned stock crossed an important psychological barrier: the big 3-0.

In fact, the last time Yahoo! stock was at $30 was on July 18th, 2006, when it closed at $32.  The next day, it opened at $26 and closed at $25.  That’s right, it tumbled $6 in one day and never crossed $30 again all year… today for the first time in some six months, the stock crossed $30 once again.  That is small consolation for a stock that was once treading over $40 and gunning to narrow the market cap gap between itself and Google.  Of course, Google trotted throughout 2006 to close the year with a staggering market cap of $150 billion while Yahoo! resigned to a capitalization of between $35 billion and $40 billion.  For an explanation of the difference between market cap and stock price, click here.  

Today, as the stock crossed $30, that put Yahoo!’s value at over $40 billion, a far cry away from Google’s $150 billion, suggesting maybe, just maybe, investors are coming around and appreciating the value that Yahoo! offers.  Sure, YouTube is now in Google’s hands, but as we have covered previously, monetizing YouTube is no sure thing.

:: Google/YouTube Strategy Highlights Why Video Advertising Might Never Actualize
:: Is Google a Conglomerate? Their Challenges in Video Suggest It Is
:: How Google Can Duplicate Ad Sense in Video Marketplace

In fact, since investing is all about managing and surpassing expectations, it could be that Yahoo! is the modern day Jack Handy, having lowered expectations to the point that the smallest victory, like “crossing the Panama canal” is a tonic for the stock, whereas Google’s garganthuan 67% spike in revenue year-over-year led to a stock decline of 2% the next day.

I do not know, last week, an exchange I had with some folks over at Yahoo! made me almost dump my entire six-digit holding in Yahoo!  This week, I find myself willing to hold onto to Yahoo! hoping that the game of expectations, and not the company’s actual operations, lead to a banner year for Yahoo! as Google struggles to diversify from being considered a one-trick pony.

Here are some previous posts on Yahoo!

:: Will Terry Semel Get the Last Laugh (Again)?
:: Should Yahoo!’s Terry Semel Go?
:: Take Yahoo! Private, Triple Your Money in Four Years?
:: Analysing Google and Yahoo!’s Traffic and Business to Understand the Gap in Market Cap

Disclaimer: if it was not made clear, I own Yahoo!

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Posted By: Ashkan Karbasfrooshan | Feb 8th

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