Seeking Alpha – June 22, 2008, via Tech Dirt:
I think Yahoo should go private. The argument against the private equity route is the credit market, but Yahoo is an amazing company with top-notch assets. The problem has been its culture, its people, and its lack of execution. Those are all fixable things.
But the going private route is now one of necessity.
So long as YHOO and Google (GOOG) compete for investors’ money, GOOG will perform better than YHOO. The specter of YHOO’s stock at $20, then $18, then $15 is not something that will help employee morale, recruitment, or retention. Look at what happened this week.
More importantly, Jerry Yang has made it clear that he has no interest in managing the company for shareholders, he wants to run it for himself.
As an entrepreneur, I understand where he’s coming from, though I disagree and believe his actions have been unethical. But he’s not a saint, he’s an entrepreneur, builder and business person, and if he wants to maintain control of the steering wheel, hey, what can others do.
*snicker*
Is this a joke?
Add:
Going from public to private is for companies in an undervalued sector where stock prices don’t reflect the value of assets or the cash flow.
It also raises the price of credit and therefore cash.
The internet oriented businesses are still emerging markets, not mature markets, and require a lot of investment for potential future gains and the stock price would have to dip to around $12/share for this to even begin to make sense.
Where is a shareholders’ class action law suit, when they need one?
Perfect answer!
Also,
Add: Going from public to private requires the approval of the majority of shareholders, who often do not agree because it makes selling their shares much more difficult. Carl Icahn probably won’t go for this for starters.
>> The problem has been its culture, its people, and its lack of execution. Those are all fixable things.
Usually not, in my observation… especially corporate culture.
I can’t explain it but corporate culture seems to survive even the most severe “blood letting.”
I was at a social event with a consultant who specialized in this very issue and he was fascinating. He says he can can sometimes trace a dysfunctional issue back to the personality of a founding member(s) of a corporation — sometimes dead for decades!
Where’s Jerry Yang gonna find $30 billion?
And if the shares drop to $12, Microsoft could jump in and buy it at a bargain.
Microhoo II anyone ?
Pish. Yahoo doesn’t look like a good game to me but, I ain’t playin’.
You figure the company can pass Google by acting just like it? That’s dumbass. The company probably can’t do better than Goog, whatever it does, but it’s sure not going to do better unless the leader can go romp with his own ideas. Let the man ramble and… what’s it to you? Is there something the government needs to know about your stock positions?
Somebody needs to explain to jerry that he does not own yahoo. If the shareholders do not throw him out I will be amazed.