July 1, 2008 – stlplace

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Last Updated on July 7, 2008 by stlplace

(Update July 7) Microsoft and Carl Icahn appeared to team up and will try to ouster the current board, esp. CEO Jerry Yang. I don’t think the current board and management is toasted because:

1) Two co-founders Jerry Yang, David Falio, along with their friends Softbank, Alibaba have more shares than Carl Icahn and his friends;

2) They will fight for the support for institutional shareholders, such as Legg Mason Bill Miller etc. Some of the institutional shareholders bought the YHOO shares much higher than the price Carl Icahn bought recently. Unless there is a liquidity problem, those “higher cost” YHOO share holders will hold on it and try to get a higher exit price.

(Original) Yahoo (Nasdaq: YHOO) shares are back to pre-Microsoft bid days today. So I went ahead of grab some shares.

The buzz on merger and proxy fight aside, I think the business and the brand of Yahoo worth more than the stock price today. Interestingly Yahoo board and management put up this power point presentation at SEC web site, to persude stock holders not to side with Carl Icahn’s proxy fight.

Yahoo headquarter Santa Clara pic
(Source: business week)

Six years ago

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Last Updated on July 1, 2008 by stlplace

Recent market turmoil reminds me 6 years ago: Enron, WorldCom and Tyco scandals are all in the news. Even blue chip names like GE and Xerox have some corporate governance problems. GE gave excessive benifits to retired chairman Jack Welch, the benifits including Manhantan condo, free corporate jets, season tickets to Yankee baseball games etc. Xerox had to re-state its financial statements (I remember got this news from Chinese newspaper when I was in Shanghai, summer 2002). It seems the corporate bean counters can not get the numbers right. That’s when I started to invest in the US stock market (sharebuilder), although in very small amount.

Shortly after we got Sabane Oxly Act, which targets the corporate internal control and financial reporting (GAPP). I remember in dot com days all the internet companies used “pro formula” (non GAPP) to tell the fairy tales to the investors. April 2003, US invaded Iraq. The US stock market bottomed there, and took off until the recent sub prime debacle.

When will the current bear market bottom? I don’t know. But one thing I know is the market go down, and goes up…all the time, as said by famous fund manager Peter Lynch (Lynch’s take on market, mp3, 5 mins)