YAHOOOOOOOO ( going much lower?)

Discussion in 'Stocks' started by Handsome, Oct 17, 2006.

  1. I came to this website to ask advice for an aunt of mine and received some, thank you. Then I decided to stick around to see what I can learn about buying and selling stock. I am learning somewhat but am confused about a lot of things so I keep coming here to read a lot.

    But with that said, I do watch stocks and I have to say that I think YAHOO is going to go to like $15.00 within the next year...I use Yahoo all the time but their in your face ads and their news stories message boards are filled with lunatics with no moderation at all...and their stock message boards seem to be filled with spammers..if Yahoo didn't have free email, I don't know what they would do IMHO.

    I have only bought 1 stock so far that I plan to hold for a long time but I am thinking about buying "puts" on a stock to hopefully make money if it goes down and I think I will on YAHOO.

    What's your opinion on Yahooooooo??
  2. Drew07


    You want to short the stock yet you said "I use Yahoo all the time". I'm sure a lot of people feel the same way about their message boards but they will still use the site for its search engine. I don't follow it too closely but it is the most popular search engine I can think of behind Google. A lot of retail traders such as myself use it on a daily basis for its Finance resources. It's been performing poorly lately so what do I know. But either way I think you should consider the risk involved with options before just jumping in. Just my 2cents.
  3. Hello, Where do I begin to start?

    My friend the problem with just buying puts on yahoo is quite simple...

    On the 3 yr chart....The Red line shows the support from the end of 2004 at around 20.00 per share...The Resistance/New Support from 2004 is around 24.20 and we are just under that level...I would think that yahoo will hold this level with no problem after todays numbers, buyback program and the outlook...
    You got to figure the 25 put options are to expensive given the buyback and the probabilities that 23.?? will be held .The only options I would even consider here would be the Out of the Money Jan 07 22.50 puts selling for 1.15....

    Problem 1) Nasdaq is in rally mode and YHOO is one of the most beaten down stocks in Nasdaq 100....Meaning its on sale to most fund managers who are getting out of speculative names and buying up the NASDAQ BLUE CHIPS....On the chart the two circles represent most of the future bad news priced in. Also, There are plenty of Nasdaq Value/Growth junkies waiting for the price to come in (most likely to 22(purple line on chart)---2004 resistance is 2006 support) to either start a new position or dollar cost a losing one....

    Problem 2) I agree that the QQQQ are way overbought currently and due for a pull back, but YHOO will hold up better than most Tech Stocks when we correct/go lower....Plenty of stocks are up over 40% in the last 3 months (Starting 7/21) these are the ones to buy puts on, not one thats is a DARLING and down 40% since Jan 2006...

    Problem 3) The straight put options would only breakeven (At expiration) at 21.35 giving you only a 110% return before you get to the extreme support of 20.00 per share...Risk Reward is not there.

    Problem 4) The November 22.50 OTM puts would NOT be a good idea considering you won't be apart of the Election results/Chaos SELL OFF....Breakeven would be below 22.00 which is were I feel the buying will flood in....YHOO has too many uncertainties, on any given day they could make a huge acquisition or buyback 3 billion worth of stock and your puts will expire worthless....I am not a CFA nor am I an options specialist, but Personally I think you could look harder and find some crap to buy puts on.....Check out the Fiber Optics stocks they are on fire and could easily have a 20% correction...BTW no buyback to contend with with these broke companies going higher everyday...

    Well thats about all.....I may consider buying even at these levels so 22 and below to me looks like a steal....

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  4. Drew07


    Thanks Cost, that's basically what I meant to say....

    Would calls be a be a better idea??
  5. xxxskier

    xxxskier Guest

    I never make predictions about stocks. Too many variables to account for.

    My opinion is based on the fact that I know several people who work there (I also have friends at GOOG). YHOO is showing signs of age when compared to the newer GOOG, YHOO as a company has become a bit bloated and less nimble as a result. Yep, it's been a tough year at YHOO, they've lost some talent due to ISOs (stock options) going underwater for many of the engineers that were hired to build out Panama. They've also lost some sales talent.

    However, my sense is that the current price is either at the lows now or pretty close to it. It may bump around a bit down to the low 20s in the next 2 - 3 months, but one can not forget that YHOO is a cash generating monster, with an extremely healthy balance sheet. My sense is that the risk-reward ratio favors longs right now.

    YHOO already reaches 1 out of 2 people on the web (worldwide), it's not surprising that growth would slow down. GOOG is much younger and still in the growth spurt phase that YHOO had in the late 90s.

    Full disclosure: I own both YHOO (and GOOG) and am holding long-term.
  6. To all of you:

    Your very thought out and detailed replies with your opinions and outlook on Yahoo sure are appreciated as it helps me understand how stocks and their prices work and I am getting a much needed education about stocks the longer I am here and ask questions.

    Thanks a lot and 2 thumbs up to you who have replied!
  7. Charts will tell you everything you need to know about the company's health/rumors/buyouts. Learn chart reading.

    The Head-n-shoulder was confirmed near 25.00 in the weekly charts. Target is 18.00.

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  8. I doubt it will fall anywhere like that. I did short it yesterday and picked up some more shares today.
  9. maybe or maybe not. That's how the measurement came out. But I'll manage the trade to see if it can get there before flipping back up.
  10. I think you guys are getting in too late on the short. The stock has lost nearly 50% of its value this year and everyone is gloomy on the stock. Everyone's expectations are at a big low.

    You are getting in on a stock that has already lost a lot of value. My opinion is that your short should have been quite a long time ago.
    #10     Oct 18, 2006