Yahoo! - a stock I’ve owned all the way up to $34 (many times) and come back down to $22 (many times) and never sold (unlike others like aQuantive and Electronic Arts where I made money time and time again trading within a range) is being circled by private equity investors, as well as strategic media players such as AOL, News Corp. Viacom, MSFT, AT&T, CBS, according to Peter Lauria of the NY Post (owned by News Corp.).
Bear in mind, the NY Post has frequently pumped the MSFT/YHOO merger rumor, helping push up the stock 18% in one day back in March, after which point both companies denied the rumor. But with the stock in the gutter, and 2008 being all about display/banners and videos (where Yahoo! is strong), then it’s a matter of time before someone launches a bid. From Lauria’s article:
“Yahoo has an execution problem, not a structural problem, and whenever you have an execution problem there are a lot of smart people with a lot of money that think they can do better,” said UBS analyst Ben Schachter. “Each day Yahoo’s stock gets cheaper, it raises the interest among these people. Yang and Filo don’t want to sell until they’ve had a real chance to turn the business around. Where the stock is now, however, they might not have that option.”
I mentioned the Yahoo! going private option all the way back in summer of 2007 fall of 2006, and a lot of people said “no way” so at the risk of saying “I told you” I think that private equity remains a very viable option, both with regards of feasibility and in terms of result.
Henry Blodget adds: “So the most likely buyer here is probably private equity. And it’s not hard to guess what a big PE buyer would likely do: Go private, lever up, pay a huge one-time cash dividend, fire a couple thousand people, sell off everything but the core business, and go public again.”
I’m not saying “told you so” mainly because it has not happened, but I will say this: if any private bankers want to discuss this, and how to maximize value, you know where to find me. In fact, while we’re talking crazy, here are some more not-so-crazy options for Yahoo!:
- status quo (a $100B market cap by 2010?)
- merger with eBay
- merger with Viacom
- merger with CBS
- acquisition by/merger with Microsoft
- taken private
- sale to AT&T
- can Google buy Yahoo!?
- Spin off ad network unit
What would you do with Yahoo!?
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