After Short Consideration, Wall St. Turns It Back On Yahoo!

Wall St. has had over two days to digest the news that Yahoo!’s (NASDAQ: YHOO) new CEO Scott Thompson will fire several thousand people. On the back of an envelope, this could save the company a quarter of a billion dollars a year.  That is a lot of money for a firm that makes about $1 billion in profit per year.

The “benefit of savings” argument has been trumped by a sentiment best expressed by Piper Jaffray’s Gene Munster. No one should expect that Yahoo! will grow in any meaningful way soon. EPS may go up because of cost reductions. Is that any reason to buy the shares? Perhaps only short term, because it is a one time event.

Investor have weighed this debate over savings and revenue and find that savings comes up wanting. Shares of Yahoo! traded at $14.90 at the open on the 5th. They are now at $14.65.

Analysts continue to wait for the moment that Yahoo! will decide what to do about its stakes in Alibaba and Yahoo! Japan. These stakes are estimated to be worth $10 billion. But, do investors really care about that decision? Not as much as might be assumed. Even when the sale of  the assets appeared close, Yahoo! traded a little over $16. In short, it seems no one cares what Yahoo! does.