Yahoo Stock Tumbles on Not Good Enough News — This borders on the ludicrous.
JAN. 18 2:19 A.M. ET Even as its profits continue to soar, Yahoo Inc. keeps letting down investors demanding even bigger gains from the Internet powerhouse as advertisers shift more of their spending to the Web.
The latest disappointment came Tuesday when the Sunnyvale, Calif.-based company reported its fourth-quarter profit nearly doubled yet still fell shy of analyst expectations. Yahoo’s shares plummeted by more than 13 percent on the news.
Ludicrous is an understatement of the stupidity of their investors.
See, this is why I dont invest in stocks. Its not skill and careful analysis of a situation… Its dumb (STUPID almost) luck trying to guese how the market will sway. when i here 2xProfits, I think of good things, not my stock droping 13% that instant.
Analyst Expectations. I am tired of these idiots. Aren’t these the same type of people that kept raising Enron stocks up so high later to find out it was basically worthless? The same ones that raised e-Bay stock through the roof long before it had posted a profit? The same people who raised airline stocks even though they were losing millions? Yahoo MAY have even lost more market share. The word may is not a fact it is speculation. Unfortunately that is what drives stocks…SPECULATION.
If Yahoo can double its profits against a competitor like Google that’s not bad.
There’s nothing ludicrous about it. Do you guys understand anything about investing? You would have had another Enron if the stock DIDN’T fall. Look at it this way. if I told you my profits were 10 million last year, you might value my company at 100 million. Then for whatever reason it looks like my profits are going to jump to 23 million, so investors buy my stocks, pushing the value up to 230 million or so. Then when I announce my profits have doubled to 2 million, the investors aren’t so happy, and the stock drops 13% to 200 million.
I know it sounds stupid on the surface, but it’s really not.
Over the past 3 months Yahoo stock was bid up from around 34 to over 43, based on the expectations (best guesses) of the so-called experts and individual investors.
When reality sets in (ie: quarterly reports) and expectations are not met, the stock price adjusts (the price people bid goes down) to reflect the actual sales and profits.
That being said, (and working for a public company) I agree that stock market expectations are often unrealistic, and, in the long run, detrimental to companies.
This happens to Apple all the time. With the exception of the Mactel announcements, every other piece of good news from the company in the last five years has been followed by a drop in stock price. I bought a bunch of their stock in 2000 when it was about $10 a share and was continually frustrated when they would announce things like G5 chips and iPods and huge profits, yet their stock would drop. Now that it’s hovering around $85 I have stopped complaining.
It looks like a good time for Yahoo! to buy back some of that stock using the profits. That would benefit its stockholders and its employees (same thing these days in many ways.)
I know it sounds stupid on the surface, but it’s really not.
and
… stock was bid up…, based on the expectations (best guesses) of the so-called experts and individual investors.
Are why I don’t actively “invest” in the stock market. My company 401k does – the nature of the beast – but I don’t.
To my mind, the market is less about “investing” and more about “online gambling”.
It has been that way ever since people stopped holding shares of “Blue Chip” stocks for the dividends they paid. Back when people expected their shares of AT&T, IBM or GM to help pay for their retirement? When they would bequeath those shares to their heirs?
A long time ago, in a galaxy far, far away…
Welcome to “New Economy 2.0”
Looks to me that it is a very good time to buy Yahoo shares.