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Jerry Yang: Throne of Blood

by John Paczkowski
Posted on October 16, 2008 at 8:11 AM PT

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Yahoo is certainly embracing its new market underperform rating, isn’t it? With rumors of December layoffs in the wind, shares in the company are trading in the $11 range today, after dipping below $12 Wednesday to yet another new 52-week low. That’s about half the price that Mithras Capital Partners suggested Yahoo sell itself to Microsoft last week, a little more than a third of Microsoft’s (MSFT) $31-per-share offer, which Yahoo CEO Jerry Yang claimed “massively undervalued” it, and almost a quarter of the $40-a-share valuation Yahoo believed it deserved.

Appalling. At $11.51, Yahoo’s (YHOO) stock price at this very moment, the company is trading at well below replacement value. “Spend $15 billion, and you could not build a new Yahoo today–not one with this global reach and brand,” Henry Blodget notes over at Silicon Alley Insider. “Wringing compelling upside out of the stock at $12 is not rocket science. At this price, it’s not even basic arithmetic. So we say again: Yahoo at $12 is ridiculous.”

Ridiculous, indeed. Perhaps the government will come along and offer Yahoo a nice $31-per-share bailout–you know, just to bolster investor confidence.

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  • Silicon ALLEY Insider.

    Yahoo is trying to bring back that old Steve Martin routine: "Get Small".
  • The only bad thing is if some tall people come over...
  • Sam Harrison
    the value of yahoo is as "going concern" and that means future revenue and profits and not a "brand" as has been mentioned

    the brand is worth zero unless yahoo can compete in search and advertising -- both areas it lags painfully

    over 40% of yahoo users use it for free web email

    other than that there's not a lot at yahoo to actually do

    jerry and the team have some real soul searching to do, they've cruised along the past 8 years playing golf and goofing off

    now there lack of attention shows
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About John

John Paczkowski has been poking fun at the tech industry and the personalities that drive it since 1997. From 1999 to 2007, he wrote the award-winning tech news Web log Good Morning Silicon Valley for the San Jose Mercury News, Silicon Valley's daily newspaper. Read more »

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Here is a statement of my ethics and coverage policies. It is more than most of you want to know, but, in the age of suspicion of the media, I am laying it all out.

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