Perhaps it was the figures out of Hitwise showing that Yahoo! (YHOO) is still losing search market share to Google (GOOG). Or, maybe fears that a recession will undercut internet ad grow.
Yahoo! (YHOO) hit a 52-week low today at $21.70. The company’s market cap is now under $30 billion. At the end of last quarter, the firm had over $2.1 billion in cash and short-term investments. It carries its stake in Chinese e-commerce company Alibaba at $1.4 billion. Its piece of Yahoo! Japan is on the books for $476 million. The properties are worth more than that. But, cash plus these interests total about $4 billion.
That leaves Wall St. with an enterprise value of just over $25 billion.
Yahoo!’s revenue run rate is at least $7 billion. At less than four times revenue, the market thinks very little of the company.
Income from operations fell to $150 million last quarter. If that weakens in the first two quarters of 2008, the shares could fall below $15, where they traded in 2003.
Douglas A. McIntyre
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